Substitution of Silver Coin for Fractional Currency.

Mr. Randall.  I move the rules be suspended and the House resolve itself into the Committee of the Whole on the state of the Union on the bill (H.R. No. 2450) to provide for a deficiency in the Printing and Engraving Bureau of the Treasury Department, and for the issue of silver coin of the United States in place of fractional currency.  Pending that motion, I move that general debate in the Committee of the Whole on the state of the Union on that bill be limited to two hours, to be divided into fifteen-minute speeches.

The House accordingly resolved itself into Committee of the Whole on the state of the Union, Mr. Sayler in the chair.

The Chairman.  The question under consideration is the bill (H.R. No. 2450) to provide for a deficiency in the Printing and Engraving Bureau of the Treasury Department, and for the issue of silver coin of the United States in place of fractional currency.  The House has ordered that general debate be limited to two hours, to be divided into ten-minute speeches.

The bill was read, as follows:

Be it enacted by the Senate and House of Representatives of the United States in Congress assembled:  That there be, and hereby is, appropriated, out of any money in the Treasury not otherwise appropriated, the sum of $163,000, to provide for engraving, printing, and other expenses of making and issuing United States notes.

Sec. 2.  That the Secretary of the Treasury is hereby directed to issue silver coins of the United States of the denomination of ten, twenty, twenty-five, and fifty cents, of standard value, in redemption of an equal amount of fractional currency, whether the same be now in the Treasury awaiting redemption or wherever it may be presented for redemption;  and the Secretary of the Treasury may, under regulations of the Treasury Department, provide for such redemption and issue by substitution at the regular subtreasuries and public depositories of the United States until the whole amount of fractional currency outstanding shall be redeemed.

The House accordingly resolved itself into Committee of the whole (Mr. Sayler in the chair,) and resumed the consideration of the bill (H.R. No. 2450) to provide for a deficiency in the Printing and Engraving Bureau of the Treasury Department and for the issue of silver coin of the United States in place of fractional currency.

Mr. Reagan.  Mr. Chairman, as soon as it will be in order for me to do so, I propose to offer the amendment which I send to the desk to be read.

The Clerk read as follows:

Add to the bill the following section:

Sec. 3.  That the silver coins of the United States of the denomination of $1 shall be a legal tender at their nominal value for any amount not exceeding $50 in any one payment;  and silver coins of the United States of the denominations of less than $1 shall be a legal tender at their nominal value for any amount not exceeding $25 in any one payment.

Mr. Reagan.  I have had the impression that it was the wish of the American people as soon as they could to resume specie payment, and, if not, to make gold and silver the currency of the country, to make the currency of the country equivalent to gold and silver.  Gold and silver are the constitutional currency in this country.  In the judgment of some, other things are lawful currency;  but as to these there is no question that they are the lawful and constitutional currency of the country.  We need both.  When we see that the aggregates of the interest, to be paid on the bonds of the Federal Government held abroad, the interest which has to be paid on State bonds, and the interest which has to be paid on railroad and other corporate bonds, are taking out of this country not less than two hundred millions of specie annually, I have not been able to understand why our legislation should demonetize a part of the constitutional currency of this country and place it that much further out of our power to reach a constitutional currency.

Nature has placed within our reach and within our possession vast amounts of silver as well as gold.  We have been in the habit of regarding it as one of our national blessings that we have it.  We are, perhaps, the largest silver-producing country in the world.  Is it to our interest to demonetize that which is known to the commerce of the world as money, and is recognized by our Constitution as money, which we have in large abundance and need daily in the ordinary business of life, as well as for the uses of the Government ?  I do not know, sir, that the amendment which I propose to offer to this bill will do all that I desire to see done in making silver a practical and useful part of the currency of this country.  But it does seem to me a step in the right direction to the extent to which it goes.

I confess, sir, as I claim no special wisdom on the subject of currency, that I have been almost confused by the remarks of the learned and distinguished gentleman from New York [Mr. Hewitt] and the eloquent gentleman from Pennsylvania, [Mr. Kelley,] who have just addressed the committee.  They seemed to object to silver:  First, because it was not valuable;  not so valuable as currency;  and then they object to it because it is so valuable that currency will take its place and it will leave the country.  And now, patiently and earnestly as this committee has listened to the remarks of those two gentlemen, I ask if there is any gentleman in the House who can tell whether their objection was most to the fact that silver would be too valuable or most to the fact that it would not be valuable enough ?  It seems to me that there was an objection to silver in any form or for any purposes of money on the part of both of them.

One of the gentlemen said that Germany from her necessities had been compelled to change her policy of demonetizing silver, and to make it again a part of the currency of that empire.  The other said, speaking however before him, that in consequence of the recognition of this value given to silver by making it money in Germany, it had increased one cent an ounce in its value, and would leave this country and go to foreign countries.

Mr. Chairman, if we have silver coin which will stand at or nearly at par all the time, if we make the silver dollar a legal tender for any sums in any one payment of $50, we give it by our law a money value with the people that it does not have now.  If we make the smaller silver coins a legal tender in any one payment for $25, we give it a money value that it has not now.  By the law as it stands to-day silver is only a legal tender for $5 in any one payment.  I would have been disposed to make it a legal tender for a larger amount than is proposed in that amendment;  but I submit it as it is for the purpose of seeing if it draws a friendly expression from this House.

In relation to driving silver out of the country by the increase of its price, I have only this to say:  I have referred to the fact that to pay the interest on United States bonds and the interest on State and railroad and other bonds, we must send out of the country not less than $200,000,000 of gold abroad annually.

If the policy of the governments of the Old World has increased the value of silver, then it aids us to utilize our silver.  For every million of silver that they take out they leave a million of dollars in gold here that would have gone in its stead, and that silver would help to pay this interest or to meet the balances of exchange in trade.  If that be true, then it furnishes a coin currency at once that may be utilized in contributing to the amount of specie and in meeting the business necessity of this country and of other countries.

Now, sir, when we look to the fact that there is a yield of very many millions of silver annually, that it is the constitutional currency of the country, that the people would be glad to possess it and would be benefited by that possession, I desire to know if it is right to go forward in the policy of demonetizing the constitutional currency of the country, and substituting in its place a paper currency which many people do not think equal to a metallic currency.  What is the advantage of issuing a depreciated paper currency instead of giving a money value to coin, the constitutional currency of this country ?  I confess, sir, that I feel scarcely able to comprehend the line of suggestion and argument made by the two gentlemen who have preceded me and who have studied this subject more than I have done, and may be greatly wiser upon it than I am.  But I am not able to comprehend --it may be my fault, not theirs-- why we should reject a metallic currency, which is the constitutional currency of the country, and demonetize it for the purpose of issuing a depreciated paper currency.  I do not understand that.  We may adopt a theory by which we may get along with paper and without a metallic currency, but there does underlie this in the judgment of the entire country the idea that the currency of the Constitution is a metallic currency, and is better than its representative, a paper currency.

I know and recognize the fact that for the purpose of commerce we cannot expect all the offices of money to be performed by metal, but while we cannot make a coin or metallic currency answer conveniently all the uses of commerce, still to strike down the value of our metallic currency, to demonetize it, to make, in the language of a number of gentlemen on this floor, a commodity of it by changing it for paper and that paper redeemable --how ?  By re-exchanging it for other paper.  Is it supposed that this will give us a currency that will have the confidence of the American people, that will bring stability to our business transactions and will secure soundness in trade, uniformity in the prices of labor, and promote the prosperity of this country, and at the same time keep prices without fluctuation either in money, labor, or commerce ?  If it will not, it seems to me a fallacy.  I do not propose to go further into this question than simply to suggest that silver is the constitutional currency, that we have it in abundance, that the policy to demonetize it discriminates unjustly against the interests of our own people and in favor of the bondholders in Europe who hold our national bonds, our State bonds, and our railroad bonds.

I trust the amendment I have offered or something like it will be adopted.  I would go further myself, but I trust that something will be done that will recognize the money value of silver, thus utilizing the products of our mines and giving us a currency better than a depreciated paper currency, relieving to that extent the financial condition of the country and to that extent taking one step toward the resumption of specie payments.

One word more before I take my seat.  I am not sure that the second section of the bill is to prove effective in preserving to us a fractional currency.  It may be that silver coin, being more valuable than the fractional paper currency, may sink into the bank vaults of the country and leave us without any fractional currency.  But I do not propose to go into that question now.  I merely propose, in connection with the part of the bill which relates to the coinage of silver, to increase the value of one part of the constitutional currency of the country, and utilize our accumulating millions of silver for the relief of our financial embarrassments.

Mr. Randall.  I move that the committee do now rise.

Subsidiary Silver Coin.

The House resumed the consideration of the bill (H.R. No. 2450) to provide for the deficiency in the Printing and Engraving Bureau of the Treasury Department, and for the issue of silver coin of the United States instead of fractional currency.

Mr. Reagan.  Why is it, Mr. Speaker, the amendment I have offered has not been called up in its order ?

Mr. Reagan.  The amendment I offered it seems to me ought properly to be acted on before a vote is taken on the motion of the gentleman to strike out the section because mine is an amendment to the second section of the bill.

The Speaker pro tempore.  The gentleman from Texas proposes to add his amendment as an additional section to the bill.  The amendment now pending is to section 2.  The amendment of the gentleman from Texas will be reached next after this.

Mr. Reagan.  I now offer (to come in as the fourth section of the bill) my amendment without modification, as found on page 4 of the print.

Mr. Randall.  I yield to the gentleman from Texas [Mr. Reagan] to offer that amendment, after which I demand the previous question on the amendment and bill.

The Speaker pro tempore.  The Chair overrules the point of order.  The gentleman from Texas offers the amendment which will be read.

The Clerk read as follows:

Insert as section 4 the following:

That the silver coins of the United States of the denomination of $1 shall be a legal tender at their nominal value for any amount not exceeding $50 in any one payment.  And silver coins of the United States of denominations of less than $1 shall be a legal tender at their nominal value for any amount not exceeding $25 in any one payment.

The previous question was seconded and the main question ordered.  The question recurred on Mr. Reagan's amendment.  The House divided;  and there were-- ayes 135, noes 71.

Mr. Kelley demanded the yeas and nays.

So the yeas and nays were ordered:

The question was taken;  and it was decided in the affirmative--- yeas 124, nays 94, not voting 71

So the amendment was agreed to.

The House resumed the consideration of the bill in relation to the Bureau of Printing and Engraving and the issue of subsidiary silver coin (H.R. No. 2450).

The Speaker pro tempore.  The gentleman from Pennsylvania [Mr. Randall] was recognized and made the motion to renew the operation of the previous question.  That is the motion now pending.  The Clerk will now read, as requested by the gentleman from New York, [Mr. Hoskins,] the amendment to this bill, which has been adopted by the House.

The Clerk read as follows:

Insert as section 4 the following:

That the silver coins of the United States of the denomination of $1 shall be a legal tender at their nominal value for any amount not exceeding $50 in any one payment.  And silver coins of the United States of denomination of less than $1 shall be a legal tender at their nominal value for any amount not exceeding $25 in any one payment.

Mr. Reagan.  The amendment of the gentleman from Indiana having been defeated, this amendment will be section 3 of the bill.  I ask that that change may be made in the numbering of the section.

The Speaker pro tempore.  That change will be made by the Clerk.

The question recurred on the passage of the bill.  Mr. Eden, Mr. Baker, of Indiana, and others called for the yeas and nays.

The yeas and nays were ordered.

The question was taken;  and there were--- yeas 123, nays 100, not voting 66;

So the bill was passed.

A message from the House of Representatives, by Mr. G.M. Adams, its Clerk, announced that the House had passed the following bills;  in which the concurrence of the Senate was requested:

A bill (H.R. No. 2450) to provide for a deficiency in the Printing and Engraving Bureau of the Treasury Department, and for the issue of silver coin of the United States in place of fractional currency.

Fractional Currency — Silver Coinage.

Mr. Sherman.  I move that the Senate proceed to the consideration of the bill (H.R. No. 2450) to provide for a deficiency in the Printing and Engraving Bureau of the Treasury Department, and for the issue of silver coin of the United States in place of fractional currency.

The motion was agreed to;  and the Senate, as in Committee of the whole, proceeded to consider the bill.

The first section appropriates $163,000 to provide for engraving, printing, and other expenses of making and issuing United States notes.

The second section directs the Secretary of the Treasury to issue silver coins of the United States, of the denomination of ten, twenty, twenty-five, and fifty cents, of standard value, in redemption of an equal amount of fractional currency, whether the same be now in the Treasury awaiting redemption, or whether it may be presented for redemption;  and authorizes the Secretary of the Treasury, under regulations of the Treasury Department, to provide for such redemption and issue, by substitution, at the regular sub-treasuries and public depositories of the United States, until the whole amount of fractional currency outstanding shall be redeemed.

Section 3 makes silver coins of the denomination of $1 a legal tender at their nominal value for any amount not exceeding $50 in anyone payment, and silver coins of less denominations a legal tender at their nominal value for any amount not exceeding $25 in any one payment.

The bill was reported from the Committee on Finance with amendments.  The first amendment was in section 2, line 6, to strike out the word "whether" and insert "whenever."

The amendment was agreed to.

The next amendment was to amend section 3 so as to make it read as follows:

Sec. 3.  That there shall be coined at the mints of the United States silver dollar of the weight of four hundred and twelve and eight-tenths grains troy, of standard silver, the emblems, devices, and inscriptions of which shall conform to those prescribed by law for the gold and silver coins of the United States, with such modifications thereof as may be necessary to render the said dollar readily distinguishable from the trade-dollar;  and in the coinage and delivery thereof, the same deviations from standard weight and fineness shall be allowed as are prescribed by law for the trade-dollar;  and the said dollar herein authorized shall be a legal tender at its nominal value for any amount not exceeding $20 in any one payment except for customs-duties and interest on the public debt;  and the trade-dollar shall not hereafter be legal tender.

Mr. Sherman.  Mr. President, I was in hopes that the Senate was willing to act upon this bill without much discussion;  but, as Senators desire it, it is due to the Senate that I should state in behalf of the Finance Committee the reasons for the passage of the bill and for the amendments proposed by the committee.

The first section of the bill contains simply an appropriation of $163,000 to provide for engraving and printing and other expenses of making and issuing United States notes;  and it is plainly unobjectionable, unless the Committee on Appropriations desire to change the amount.

The second section provides that the Secretary of the Treasury is directed to issue silver coins of the United States of certain denominations in redemption of an equal amount of fractional currency, and is, in substance, the provision of the existing law, but is inserted by the House of Representatives for the purpose of making the direction of the law mandatory.

The third section of the bill, however, presents the most difficult question in political science.  This section, as sent to us by the House of Representatives, provides:

That the silver coins of the United States of the denomination of $1 shall be a legal tender at their nominal value for any amount not exceeding $50 in any one payment and silver coins of the United States of denominations of less than $1 shall be a legal tender at their nominal value for any amount not exceeding $25 in any one payment.

This presents the question of the single or double standard, which has probably been the occasion of more pamphlets, books, and documents than any other question whatever in political science.  As a general rule, the English authors have favored a single standard upon the gold basis;  the French writers have generally favored the double standard of both gold and silver;  while there are writers without number who have advocated, some the single gold standard, some the single silver standard, and very many of them the double standard.  I might state the argument briefly, without going into details, in the language of a recent author, in which the arguments in favor of the single gold standard are concentrated into three.

The advocates of the gold valuation say, "There is a constant liability to fluctuations in the standards of value.  It is better, therefore, that, in order to secure unity, there should be but one standard, and this standard should be gold."

The second argument brought forward by the advocates of gold valuation is, that silver is too heavy for the present purposes of commerce;  that its carriage and handling are inconvenient, and that gold, being so much lighter, is more suitable.

The third argument or allegation is, that all civilized nations either have adopted, or show the disposition to adopt, the gold valuation.

---Seyd, Metallic Currency of the United States, page 39.

Each of these positions has been answered, as it is thought, by those who advocate the double standard, or the single silver standard.  To the first objection in regard to the fluctuation of the value of gold and silver, it has been answered that sometimes gold has declined in value as compared with silver;  sometimes silver has declined below gold value;  sometimes the variation is one way and sometimes the other, and therefore the mere fact of variation is not an objection to either silver or gold as a standard, and ought to have no weight in the argument.  The two metals have kept together with remarkable nearness;  and it is said with great-force, it seems to me, that to adopt the gold standard alone and demonetize silver would be to deprive the poor people of the world of the money which alone measures the value of their productions and of their labor.  The gold, from its nature, is not divisible into a less coin of convenient form than $2.50.  The dollar gold coin in this country and the five-franc piece in France never attained any considerable circulation.  Therefore gold alone is not suitable for a currency because it will not measure the daily wants of the great mass of mankind.

To the second objection, that silver is too heavy to export, it is answered that it costs no more to transport $100,000 of silver from one port or place to another than it does $100,000 of gold.  This is true, as shown by the statistics all the world over.  By any form of conveyance the price of transporting $100,000 of silver is precisely the same as of transporting $100,000 of gold.

Mr. Edmunds.  Based on value and not on weight ?

Mr. Sherman.  Yes.  I was going to say that it is on the ground that transportation is based on value and not on weight, because it is the risk of loss that is the chief element of cost.  That is the answer to the second argument.

The third allegation, that all civilized nations either have adopted or shown a general disposition to adopt the gold valuation, is denied as a matter of fact.  England alone of all the great powers of the world has adopted the single gold standard.  Half a dozen other countries of minor importance have adopted it.  The body of the nations of the world have adopted either the double standard or the silver standard.  The great mass of mankind (two-thirds of the human race) still use and do all their business upon the silver standard alone;  so that there is no such weight of example among the nations of the world as gives to either standard a decisive advantage over the other.

Mr. President, I shall dismiss this controversy of the schools without going further into it, although it is a very interesting subject of study, and I could give Senators references to about a hundred volumes about it.  I will dismiss it so far as the theory of the question has been discussed among political economists, but I wish to call the attention of the Senate in some detail to the existing law of the United States and also to the laws of Great Britain, France, and Germany, so that we may know precisely what the condition of the coinage of those countries is, in order that we may test by law and experience whether the amendments proposed by the Committee on Finance are wise or not.

The first Unites States statute on the subject, which established the Mint, was passed in 1792 and is contained in volume 1 of the Statutes of the United States, page 248.  I have it here before me.  This act establishes the proportional value between silver and gold by declaring that one ounce of gold shall be equivalent to fifteen ounces of silver, and the coins are based on the idea that the relative value of silver to gold shall be as fifteen to one.  The consequences of this error will be perceived in a moment.  The alloy of our gold coin was one-twelfth alloy to eleven-twelfths fine gold, or the English standard.  The alloy of silver coin was one hundred and seventy-nine parts to fourteen hundred and eighty-nine of silver, or about one-ninth.  The weight of the gold coin was 27 grains to a dollar, the weight of the silver coin was 416 grains, and either gold or silver was made a legal tender for all purposes.  Thus the double standard was adopted by the people of the United States at the beginning of the Government to the fullest extent.  The only debate on this bill, showing that it excited no attention, was as to whether the head of the President of the United States for the time being or the head of the Goddess of Liberty should be put upon the coin.  That was the only thing they cared about.  All the philosophical questions involved in the proposition, the relations of silver to gold, and whether they should both be made legal tender, do not seem to have been deemed worthy of consideration in that early Congress of the United States.

The result of this act was to demonetize gold, because one ounce of gold was worth more than fifteen ounces of silver;  and then the law of currency comes in, that if a coin or currency is undervalued it flees the country.  The result was that in the early period of our history gold entirely disappeared.  It is a part of the history of the time, and is also shown by official reports, that there was substantially no gold in the United States from 1792 to 1834, simply because the gold, being undervalued, fled the country, and silver and bank-notes were the basis of all transactions.  In order to counteract this effect of our coinage law, Congress, in 1834, by an act to be found in the fourth volume of the Statutes at Large, reduced the weight of gold coin from 27 grains to the dollar to 25.8 grains of standard gold, nine-tenths fine.  That is, they made one ounce of gold equal to sixteen ounces of silver.  That was the substance of this change.  They changed the relative value of gold and silver to each other;  and subsequently, by the act of 1837, they changed the silver coins so as to conform to this standard.  By the act of 1837, the alloy of gold and silver coin was one-tenth to nine-tenths fine.  That is the metrical system of alloy.  The weight of the silver coin was fixed at 412½ grains for a dollar.  It was of less weight than the old silver dollar but was of the same value, because it was finer, having less alloy.  By these two acts both silver and gold coins were of the same fineness and bore the relation to each other of one to sixteen.  And the weight and fineness of gold coins thus fixed has never been changed;  and all coins, both silver and gold, were a legal tender for all sums.

Here again a mistake was made that would appear to be very trivial in ordinary legislation, but it was great enough to revolutionize our metallic currency.  In 1834 and 1837 Congress underestimated the value of silver;  that is, one ounce of gold was not worth sixteen ounces of silver;  but by law they made it so, and at once this result commenced:  Gold commenced coming into the country, and silver flowing out;  so that from 1834 or 1837 until 1853 silver had entirely disappeared from the currency of the United States by reason of our laws undervaluing silver as they had previously undervalued gold, the true ratio of silver to gold being between one to fifteen and one to sixteen, or one to fifteen and a half.  The effect of this is stated very strikingly by Mr. Seyd, from whose book I will read an extract---

The President pro tempore.  The morning hour has expired.  Is there objection to continuing this bill ?

Mr. Hamlin.  I should be very glad indeed to proceed with the consideration of the bill which was under consideration at the last adjournment, but I am myself aware of the necessity which attaches to the measure now before the Senate in reference to the employés of the Government, and, at the suggestion of the Senator from Ohio I think it is my duty to yield to allow this bill to proceed informally.  I will not call up the unfinished business, but let it maintain its place, to be proceeded with on the conclusion of this bill.

Mr. Sherman.  I have no objection to that.

The President pro tempore.  Is there objection ?  The Chair hears none.

Mr. Sherman.  I wish to get through with this bill to-day if possible.  I will read from Mr. Seyd's recent work on the metallic currency of the United States in regard to the effect of the laws of 1834 and 1837:

The disappearance and exportation of the American silver coinage were caused by quite a different matter.  The American silver coinage was was always liable to exportation for the simple reason that it contained an undue proportion of silver.  In all countries where the double valuation prevails the relative proportion of value between gold and silver stands at 1 to 15½, and the market value of silver in countries where it is not a standard give on the average the same result.  In the United States alone the rate taken was one part of gold to sixteen of silver, (15.988.37) the proportion resulting from the eagle at 258 and the silver dollar at 412½ grains.  The dollar therefore contained 3.29 per cent. more silver than it ought to have contained according to its nominal value.  No wonder, then, that the dollar was rapidly exported, and that no one found inducement to bring silver to the mints for mintage.  And let it be understood that the supply of gold had little or nothing to do with this.  Long before the discovery of gold in California, ever since 1837, has the effect of this premium on the United States silver dollar made itself manifest.  In exchange for it the foreigner need not have supplied gold;  other commodities served the purpose of realizing elsewhere the large profit which the United States gave to the exporter of her silver coin.  Much that has been doubtful, peculiar, and unsatisfactory in the history of the United States currency between 1837 and 1850 owes its origin to this astounding mistake on the part of the Government, which must, as every one can see, have given rise to general disorganization of the currency and to disappointment in the capacity of the country to retain metallic currency.  I go further, and say that it was the cause why America was obliged to make so large a use of paper money, with all its evils of unequal interests, extravagant habits, and expenditure.

It is remarkable that by the adoption of the first standard of 1792 gold at once fled the country and silver filled the channels of business, and that by the attempt to correct this error our laws overleaped the market and true relative value of these metals and established the rate of silver too low, and this drove silver out of the country and gold became the universal currency.  This necessary result was deepened and strengthened by the fact that in 1850 by the discovery of gold mines in California gold came pouring into us in such floods that our silver currency entirely disappeared and its relative value increased.  All the money we had was gold money, not silver money.  We had no change.  In some parts of the country we resorted to "shinplasters."  Thus a slight-error in fixing the relative value between gold and silver made two remarkable movements in these precious metals, a striking illustration of the necessity for the utmost care in dealing with all questions affecting metallic money.

In 1853 Congress undertook to correct this evil, and under the lead of Mr. Hunter, of Virginia, then chairman of the Committee on Finance, the act of 1853 was passed.  I have before me a very learned report made by Mr. Hunter, in which he pointed out the evils of the then existing system and prescribed, as he thought, a remedy.  Perhaps I had better read to the Senate a brief extract from Mr. Hunter's report to show that he examined the matter with great care;  that he appreciated the evil to be remedied;  but even he finally fell into the error of largely demonetizing silver by not reducing the silver dollar then undervalued.  Mr. Hunter, on the third page of his report, says:

Indeed, it appears from a carefully compiled table appended to Mr. Ingham's report, (document No. 117, page 101,) that from 1492 to 1825 there were coined from the American mines 4,310,000,000 in silver, and only $1,890,000,000 in gold.  But, in tracing the effect of this change of the relative value upon particular countries, we must not forget its operation upon the rest of the world.  In thus excluding one of these metals from one country, if its property and trade were large, and in thus forcing more than its natural proportion into manufactures, we should diminish the volume of specie currency of the world below the natural supply.  How this would affect mankind will be hereafter examined.  But the mischief would be great indeed if all the world were to adopt but one of the precious metals as the standard of value.  To adopt gold alone would diminish the specie currency more than one-half;  and the reduction the other way, should silver be taken as the only standard, would be large enough to prove highly disastrous to the human race.  Indeed, a reference to the history of the precious metals and the general course of human production can scarcely fail to convince us that there has been a constant tendency to appreciate their value as compared with the residue of the property of the world, and that every extraordinary increase of the supply of the precious metals of which we have any account has exercised a highly beneficial effect upon human affairs.  When contracts are made by a standard which is gradually contracting, the advantages are on the side of capital as against labor, and productive energy is cramped by receiving less than a fair share of the profit of its enterprises.

It is manifest from this extract that I have read from Mr. Hunter's report, which is itself very voluminous, that the desire of Mr. Hunter and those who voted for the passage of the act of 1853 was to bring back silver into this country, so that we might have silver and gold again as the currency of the country, and the measure they adopted was intended to produce that effect.  What was it ?  By the act of 1853 no change was made in gold coin or in the silver dollar.  It was left demonetized by being rated at less that its market value.  The act provided, however, for subsidiary silver coin;  the half dollar, the quarter dollar, the dime, and the half dime.  It prescribed the weight of the coin at 384 grains to the dollar, instead of 412½ grains.  It made the subsidiary coin a legal tender for $5, and all other coins were left a legal tender without limit.  This act, as I stated, provided for a subsidiary coinage worth about 6 per cent. less than the par of specie, assuming the par to be at the rate of sixteen to one.  The subsidiary coin was only made a legal tender to the amount of $5, leaving the silver dollar still in force a full legal tender for all contracts.

The effect of this act of 1853 was to bring back to us silver change in abundance as a token coin.  There was issued between 1853 and 1861 about $48,000,000 of silver coin.  It was the change of the country, and to that extent silver was monetized again and in daily use;  but the dollar was still undervalued and has never entered into circulation from 1853 to this time.  Except for special purposes, the silver dollar of the United States disappeared from among the coins of the world for the palpable reason that it was more valuable to export than to coin.

Mr. Maxey.  I will ask the Senator from Ohio if the dollar established as the unit of value shortly after the adoption of the Constitution was left of the same weight and fineness in 1853 that it was originally established ?  The old Spanish milled dollar, in other words, was the unit of value originally;  and was it not left so ?

Mr. Sherman.  I shall answer my friend from Texas with great pleasure.  The silver dollar of the United States has never been changed in intrinsic value;  the change has been in the gold dollar.  But as Senators see that this is a technical question and I have to be precise in facts, I ask that they will not cross-examine me until I get through.  Then I will answer all questions.

The effect of the law of 1853 was practically to demonetize the silver dollar to provide a subsidiary coin for circulation, and to give employment to about $48,000,000 of silver for the change of the country.  So the laws of the United States as to our coins continued until February, 1873, when Congress passed an act to revise and consolidate all the statutes in regard to coinage.  This act is embodied in the Revised Statutes.  The changes made by this act are very slight.  No change is made in the gold coin;  it is still twenty-five and eight-tenths grams of standard gold to the dollar.  The subsidiary silver coins were to weigh twenty-five grams to the dollar.  That raised the value of the silver coins from three hundred and eighty-four grains to twenty-five grams or three hundred and eighty-five and eighty one-hundredths grains, so that it very slightly raised the amount of silver in the subsidiary coins in order to harmonize with the French coins;  so that now $1 of our subsidiary money is precisely of the same weight and fineness as five francs of the French coin, and our silver coin is now easily convertible into French or Latin unit coins.  The old silver dollar was dropped out in the revision, and why ?  Simply because it was not in use.  No law repealed the silver dollar;  it was simply dropped out --there was no such coin in use.  It could not circulate because in 1872 and 1873 the silver dollar was worth more than the gold dollar.  As it had not been coined for twenty years it was dropped out from among the coins of the United States.  As a matter of course this does not prevent us restoring it at any time when we think it is for the public interest to do so.

But the most striking change made by the act of 1873 was the introduction of a new dollar, called the trade-dollar.  Senators here mostly understand the reason why that trade-dollar was provided for.  Silver was beginning to be affected by the events that I shall allude to presently.  There was a great demand for silver in China, however;  and the Mexican pillar dollar for a good reason had gotten into the markets of China, and was the most desirable coin, because it was worth a little more than the dollar of the United States and more than the dollar of any other country.  Therefore in China they would not take anything but the Mexican pillar dollar.  There they measure small differences much more carefully than we do.  In order to induce the Chinese to take our dollar instead of the Mexican milled dollar, so that we might give to our people a chance to export their silver in the form of coin, we authorized the holders of bullion to present their bullion at the mints of the United States to be coined into trade-dollars containing 420 grains of standard silver.  The old dollar only contained 412½ grains;  so that the trade-dollar contained 7½ grains more of silver, and that made it a little more valuable than the Mexican dollar, which contained 416 grains of silver with a little less alloy than ours.  The trade-dollar has a shade more value than any other dollar, and at once superseded the Mexican silver dollar in China, where they measure silver coins with the greatest accuracy.  The result was that the Government of the United States, by coining at the expense of the holders of this bullion trade-dollars, have introduced into the commerce of the world a new money, which is now being absorbed largely in Japan and China and all Asiatic nations.  This is done, not at the expense of the United States, but at the expense of the holders of the bullion, who pay the cost under the law of 1873.

I have stated, I believe, all the laws of the United States without exception which affect the value either of gold or silver coins.  There have not been many of them.  Our coinage laws have been very uniform, very stable;  no changes have been made except for an obvious purpose.  The law of 1792 stood on our statute-books unchanged until 1834, and then was only modified so far as the gold coins were concerned;  and the law remained unchanged from that time until 1853, and was then only modified so as to introduce subsidiary coinage;  and it remained then until 1873, when it was only changed so as to introduce the trade-dollar.

Those are all the changes, so that the silver dollar of our revolutionary fathers is the silver dollar of to-day if we choose to restore it. ---[Three weeks ago, in this same Senate, you said "there is no power" to issue silver dollar.]

The trade-dollar has been introduced simply as a commercial dollar.  Here is the difficulty in which we are placed:  by the sudden fall of silver the trade-dollar, instead of being worth more than gold, is worth less than gold;  and yet by the act of 1873 the trade-dollar was made a legal tender.  The result is that a dollar less valuable than gold is made a legal tender for the payment of gold contracts to a limited amount.  But that is not the worst of it.  We could bear that very well;  but the worst of it is that by the act of 1873 any holder of silver bullion can convert his bullion, at the mere cost of minting, into dollars;  and then the law steps in and makes them a legal tender for gold values, to the extent of $5, for customs dues and the like.  Thus the Government of the United States allows private individuals to regulate the amount of our coinage by giving every holder of bullion the opportunity to convert his bullion, which is worth 7 per cent. less than par, into par and make it a legal tender to the extent of $5.  It is perfectly manifest to every man who will examine this matter that we have got to do one of two things:  either take away from the trade-dollar its legal-tender quality or take away the right of the holder of bullion to make the trade-dollar.  We must do one or the other.

The simplest thing to do is to repeal the section authorizing the issue of the trade-dollar.  But then come these gentlemen from California and Nevada and say, "We have built up a trade on this;  it is a convenient form of exporting our bullion;  we do not ask you to pay the expense, however.  We pay that ourselves.  Why should you step in now and destroy that which we have built up ?  And there is no answer to it.  Therefore I think it it well to keep the trade-dollar as it stands, to enable the people of this country to convert their silver bullion into the best form for commercial purposes, but to take away from it its legal-tender quality, and then no silver coin can be issued except by the United States;  and the profit and the benefit inure to the United States;  and, more than all, the amount is regulated by the United States.  It is manifest that if the trade-dollar is to continue and silver is still to stand depreciated, with the right of any holder of silver bullion to convert it into trade-dollars, the country will be overwhelmed with money that is not par in gold.

I hope, therefore, Senators will see that, so far as the trade-dollar is concerned, while we do not wish to interfere with its usefulness and its value, we must take away from it that attribute which was not intended to be given to it when the law was passed which changes its character from a commercial dollar to a forced legal-tender token coinage.  We must, therefore, restore the trade-dollar to what it was intended to be, purely a commercial agent.

Mr. President, I have now stated all I desire to state about the laws of the United States.  But this question is affected by the laws of all other countries with whom we have dealings.  The question of coinage is an international question.  It is not enough for us to stop with seeing what our own laws are and deciding how far we shall change them, but we must see what the laws of other countries are, or otherwise we may be in the same position that Congress was in 1853 and in 1837 and in 1792, when by making a mistake in the relative value of gold and silver they drove out of circulation, contrary to their intention, first gold and then silver.

Great Britain is generally supposed to be at the head of the nations that have adopted what is called the single standard of gold.  In England anybody may carry gold bullion of any kind or in any form to the mint and there have it coined into sovereigns of certain weight and fineness, without charge at all.  They have some refining-charges, but they make no charge for coinage.  The same right is conferred upon the owner of silver bullion, with this qualification, and it is a very important one:  a man may take a pound troy of silver bullion of a certain standard, or of what will make a pound troy of silver bullion of a certain standard of fineness, and Great Britain engages to convert that into sixty-six shillings;  and then it pays him sixty-two for it.  It retains the other four for its own use as a seigniorage.  It issues sixty-two shillings of the proper fineness for sixty-six shillings' worth of bullion, levying the four shillings for its seigniorage.

Mr. Bogy.  That makes the alloy.

Mr. Sherman.  No;  the shillings issued are of the standard fineness.  The result of that is that every English shilling is worth less than bullion in intrinsic value, but by being made a legal tender for small amounts and limited in amounts it is equal in money value to gold coin.  It is used as what is called a "token" coinage.  The weight of the shilling is eighty-seven and one-fourth grains.  Four shillings are equal to three hundred and forty-nine grains of standard silver.  The alloy of standard silver there is eighteen two hundred and twenty-seconds or seventy-five one-thousandths.  Their silver coin is finer than ours, but it is not so valuable, our alloy being one-tenth, but containing more grains to the dollar.  The value of the English silver shilling in our money is twenty-one cents and four mills.  The value of the gold shilling is twenty-four and thirty-three one-hundredth cents, or twenty shillings passes for a sovereign worth $4.866.  The difference between the English shilling and our quarter dollar is in favor of ours.  Our coin is more valuable than theirs.  Our silver coin has always been more valuable than theirs since 1816.  And yet, notwithstanding that Great Britain has thus debased its coinage, four shillings to sixty-six, they keep in circulation of this token coinage in a country of 32,000,000 people from eleven to fifteen million pounds sterling on an average, over $60,000,000.  Though everybody knows it is intrinsically worth 6 or 7 per cent. less than gold, yet from the fact that tbey carefully limit the amount and regulate its issue it is maintained in circulation, and is the coin by which nearly all the labor of England is paid.  It is a legal tender to the extent of forty shillings and no more.  Nor is it necessary, in order to maintain this large amount in circulation, to have it a legal tender for any greater sum, because, the Government having the exclusive power to issue it, they only issue so much as the demand calls for at par with gold.  It is a token coinage.  Such is the law of Great Britain.

In Canada, where there are 4,000,000 people, their twenty-five cent piece is worth a little less than ours.  It is very much like the English coin, but a little less valuable than ours.  I estimate it at six one-thousandths of a grain less than ours.  As a matter of course our silver coin will pass between this country and Canada from hand to hand when we get to specie payments.  Our subsidiary silver coin will go all over Canada.  It is worth a little more than the Canadian money, and I have no doubt it will fill the channels of business in Canada.

This brings me to the statement of the silver coinage of France, Belgium, Switzerland, and Italy, composing 72,000,000 of among the most intelligent people in the world.  Their money is based mainly on the French standard of 1792, and it is regulated by the convention of December 23, 1865, which I have here before me.  It is, probably, the most important monetary convention now in force in the world.  I will cite some of the provisions of it.  The weight is five grams per franc, so that they have a simple metrical unit of weight.  For five francs it is twenty-five grams, and that is precisely the weight of our two half dollars or four quarters.  The fineness is nine-tenths, precisely like our own coin.  The limit of amount is fixed at six francs, or $1.20, per inhabitant.  In Great Britain they have no enforced limit, because it being entirely in the hands of the government, the director of the mint controls it according to supply and demand.  But in this convention they have provided that neither of the nations shall issue more than six francs per inhabitant.  But that makes an enormous sum.  The limit of $1.20 per inhabitant would give to Belgium 32,000,000 francs;  France, 239,000,000;  Italy, 141,000,000;  Switzerland, 17,000,000;  in all 429,000,000 francs, or about $82,000,000 or $83,000,000.  And this, remember, is subsidiary coin.  Each nation has its standard of silver besides, which it maintains at the relation to gold of fifteen and one-half to one.  The five-franc piece in France is precisely like our dollar was in 1853 and up to 1873 --a legal tender for all sums.  The same law applied to us would make a Circulation of about $50,000,000, except that our country being more scattered it is generally supposed by those who have studied the subject that we can now maintain a circulation of subsidiary coin of seventy or eighty million dollars with our present population.

The legal tender among private individuals under this convention is fifty francs, or $10.  It will be seen that wherever silver is used in modern nations, the limit of legal tender is carefully preserved as the only way of preventing the depreciation and exportation of one or the other of the coins.  Among private individuals it is limited to fifty francs, or $10;  among the contracting states to one hundred francs;  that is, each of the contracting states agree to receive it at their treasuries for one hundred francs.  The old coinage is redeemed in the gold and silver of that standard.  Such is the conventional law which I have before me, which regulates now the monetary transactions of 72,000,000 people.  There is no doubt whatever, that in 1867, when the Paris monetary conference was held, if Germany had consented, this conventional law would have been agreed to as an international law, and would have been made the basis of the entire commerce of the world.  I was present at that monetary convention, and then it was the general sentiment of the nations represented that gold should be the unit of values;  and after that, by providing for subsidiary silver coinage and maintaining it at its relative value fixed by this convention of fifteen and a half to one, there would have been no difficulty in maintaining that relative value.  What defeated that convention was the pride of the English in the pound sterling, and the refusal of the German nation, then not united as now, to surrender the silver standard, which was then their sole standard of value;  and so the effort for an international money failed.  But the monetary convention of the Latin states, which was the work of purely scientific men, has proved a success.  One of the provisions of the convention authorized any nation whatever to join it, with all the advantages conferred by that convention;  so that it is open to all the world.  It was not more successful only for the reasons that I have given.  In this convention the legal relation between gold and silver is fixed at fifteen and one-half to one.

Now I come to what is called the German law;  and I think there is a great deal of misapprehension not only in the newspapers and among the intelligent people, but among the mass of our people, in regard to the recent action of Germany.  I have the German statute here, which I have taken the pains to have translated, not being able to read it in the original vernacular.

In Germany formerly silver was alone the standard of value.  They had but little gold.  I remember very well in 1867, in traveling in Germany, that we relied entirely upon the English sovereign and the French twenty-franc piece to pay expenses in Prussia because the German coinage was abominable, composed of pfennigs and a confusing variety of coin.  There were many states or nations in Germany;  they could not unitize;  they could not agree.  They had the silver thaler, which was the standard of value, but there was no gold in Germany that I saw except the French napoleon and the English pound sterling.  But when Germany became a great power as the result of the recent war, the German Reichsrath, on the 4th of December, 1871, provided for gold coins and established a mark, worth twenty-three and eight-tenths cents, as the unit of value.  That is the unit not only of silver but of gold.  The ten-mark piece of gold is worth $2.38 of our money, and so it goes on in multiples.  That act of December 4, 1871, only related to gold coins and provided a unit, but did not demonetize or affect in the slightest degree the silver coinage of Germany, which then amounted, according to some estimates, to four or five hundred million dollars.  By the act of July 9, 1873, which I have before me, Germany undertook to change her standard from a single silver standard to the double standard of silver and gold.  The common impression now is that Germany has adopted the single gold standard and demonetized its silver.  On the contrary, the change in Germany is simply from the single silver standard to the double standard of gold and silver.  I have the translation furnished me by an employée of the library --and I suppose it is correct-- of the statute of the Reichsrath:

Article 2 provides that in addition to the gold coins created by act of December 4, 1871, there shall be coined also silver coins.

Article 3 provides for pieces of 5 marks, 2 marks, 1 mark;  of 50 pfennigs, and of 20 pfennigs;  nickel and copper.

The coinage shall be regulated by the following decisions:

One pound of fine silver shall be coined into 20 pieces of 5 marks, 50 pieces of 2 marks, 100 pieces of 1 mark, 200 pieces of 50 pfennigs, and 500 pieces of 20 pfennigs.

The alloy consists of 900 parts of silver and 100 parts of copper, 90 marks weighing one pound.

The process of coinage shall be decided by the Bundesrath.  The deviation from the standard shall not exceed in single coins .003 in fineness, and not more than .001 in weight, with the exception of the 20-pfennig coins;  the normal weight, however, must be preserved in the bulk.

Article 4 provides that the total amount of silver shall, until further orders, not exceed 10 marks per head of the population.

This is the important provision of this law by which a larger silver coinage is authorized in Germany than is found anywhere else in Europe, because while 6 francs is the limit in France, while our limit has practically been only about $1.25, having only issued $48,000,000 of this coin, and while in England the amount has been limited to about $2 per inhabitant, in Germany the amount of silver provided for by this law is 10 marks per inhabitant, or 2.38, making for 40,000,000 of people at least $100,000,000 of silver coin;  and, as I will show, they have already issued nearly two-thirds of that amount.

Mr. Maxey.  Have they limited their silver as legal tender ?

Mr. Sherman.  I will read that:

After every new issue of coins an equal quantity of the old circulating silver coins shall be drawn in, beginning with the coin under the thirty-thaler foot standard.  The value to be determined in the way explained in article 14, section 2.

Art. 7.  The coinage and redemption is done at government expense.

Art. 9.  Nobody is obliged to receive more than 20 marks in silver or more than 1 mark in copper.

The Reich and the Landes cassa (government banks) shall receive silver to any amount as legal tender.

That is, all the government banks are bound to take silver as legal tender for all transactions.

The Bundesrath will designate the banks which shall exchange amounts of not less than two hundred silver marks for gold coin.

The government undertaking to supply the banks with the necessary money to redeem and the banks undertaking to redeem all this money at its par rate, so that is practically a legal tender.

Art. 10.  Silver coins which have lost considerable weight by circulation shall be received in Reichs and Landes cassa;  they must be, however, drawn in at the cost of the empire.

Art. 14, Sec. 2.  In reducing the value of other coin, not gold, the value of the thaler is three marks, the gulden süddent: w&aauml;h ring one and five-sevenths marks, the mark of Hamburg one and one-fifth marks.

The important bearing of these provisions of the law will be seen when I come to look at what has actually been done in Germany and has so disturbed the monetary values of the whole world.  The amount of silver coin outstanding in Germany has been estimated by various authorities, and was estimated by the government of Germany at $340,000,000;  but it is shown now while they are changing currency from one form to another the amount was underestimated, so that the amount of silver in circulation in Germany alone in 1873 when this act passed was probably $400,000,000.  The one and two thaler pieces which were the common circulation of Germany are still a legal tender for all amounts, and are received by the government at par in gold.  The great body of them is still outstanding.  A recent writer in the London Economist says:

As regards the bearing of this arrangement on the requirements for gold in our market, the leading facts are, first, that the one and two thaler pieces coined were estimated by the German government in introducing the coinage law of 1873, to amount to 459,000,000 thalers, equal to about $340,000,000, or £68,000,000, of which the two-thaler pieces represent 65,000.000 thalers, or £9,750,000, and the one-thaler pieces, 394,000,000 thalers, or £59,000,000;  second, that according to the estimates of writers like Herr Soetbeer and others, at least three-fifths of this silver coinage is still in circulation --that is, 180,000,000, about £36,000,000 in all, of which £5,850,000 would be in two-thaler pieces and the remainder, or about £30,000,000, in one-thaler pieces.

That is, there is still outstanding $180,000,000 of the old silver coins of Germany, besides the amount that has been issued of new coin.  I have here also a statement taken from the London Economist of a late date, March 25, 1876, of the amount of new coins issued by Germany:

On the 11th of March all the newly-coined money in Germany amounted to:
In gold pieces, 1,356,141,220 marks
In silver pieces, 193,118,226.

Or about $300,000,000 in gold coin.  Or about $50,000,000 of new silver coins have been issued, besides having outstanding, as I have shown, $180,000,000 of old silver coins, which are now a legal tender for all purposes.  The enormous effect of this law in Germany, and as a consequence the partial demonetizing of silver coins, I suppose is felt by every man, woman, and child who buys or sells anything.  I suppose there is no act of any parliament that has had so wide-reaching effects as this act of the German Parliament.  The amount of coin in the world is estimated by Mr. Seyd and other technical writers at $3,200,000,000 silver and $3,500,000,000 in gold.  That does not include plate, jewelry, or silver in the form of merchandise, but that in the form of coin.  So the effect of the act of Germany, aided no doubt somewhat by the large supply of silver by our mines, has been to reduce the purchasing power of the whole of this enormous sum of thirty-two hundred millions of silver fully 10 per cent.  The fall of the silver trade-dollar in this country has been from 103 to 91.  This effect extended itself to what is called the Latin league, who feared that German silver would be rushed into Italy, France, and the nations of the league, for coinage purposes, and they interfered at once and stopped the coinage of silver.  It also created an impression in India;  so that, for the first time for two hundred years, the current flow of silver into China and India was arrested but for a short time.  It is one of the remarkable currents of trade in the history of mankind that with the amount of silver that has been coined out of the mines of the world the great body of it flows in an unceasing and continuous stream into these oriental nations;  and only for three or four months a feeling of alarm was created in India and China lest that which they cherish as the measure of all their values should become valueless to them.  It created a partial panic, but that panic has passed, and now the stream goes on;  silver flows into India and China and all the Asiatic nations as heretofore.

That was not the worst of it.  It at once begot a struggle for the possession of gold between all the great nations of the world, because everybody could see that if you demonetized $3,200,000,000 of silver coin and made $3,500,000,000 of gold coin the sole standard of all the transactions of the world, commencing with the great nations of Europe, then extending to the smaller until it reach the Asiatic countries, it would enormously add to the value or gold, and therefore it was that the Bank of France, the Bank of England, and the Imperial Bank of Germany at once commenced grasping for gold in whatever form.  Therefore what we have observed recently is not so much a fall of silver as it is a rise of gold, the inevitable effect of a fear of demonetizing the whole mass of this silver;  and now the Bank of France has in its vaults the enormous amount of $300,000,000 of gold in coin and bullion;  England has in the Bank of England $170,000,000, and the Imperial Bank of Germany has $125,000,000.  So, in these three depositories there is over $600,000,000 of gold, or nearly one fifth of the supply of the world.  This accumulation of gold has been produced largely, first, by the partial demonetization of silver in Germany, the endeavor of the Imperial Bank of Germany to accumulate gold, and the effort made by the Bank of France to meet that current, and then by the Bank of England, until these three great banks, three spots on the face of the world, contain nearly one-fifth of all the gold that has been coined from time immemorial and that now exists in the world.

Mr. President, the effect of the movement in Germany has already reacted in a wonderful manner.  A recent order in Germany has suspended the conversion of the thaler and monetized it.  I have not that order, but I have here a recent French pamphlet, a very incisive one and a very well-written one, which speaks of the recent action of Germany thus:

It is scarcely necessary to point out the gigantic losses Germany would, before causing this disastrous crisis, entail upon herself should she continue to offer heavy sums of silver and to demand heavy sums of gold.  The silver so offered would be more and more depreciated, and the price of gold would rise in a converse ratio, entailing a loss of millions to the German treasury.

The ministry of the Empire have foreseen these difficulties.  To meet them they inserted in the decree, ruling that from January 1, 1876, all payments shall be made neither in florins nor thalers, but exclusively in marks, a restrictive clause to maintain in circulation the thalers, which are to be counted as gold and to be each held as equivalent to three marks.

Since demonetization has begun, silver which is constantly offered to foreign markets goes on falling in price, while at home the value of the thaler, this coin being a legal tender under the restrictive clause above mentioned and appraised at three golden marks, is not depreciated.  Bankers, therefore, when they have payments to make abroad, are careful not to transmit thalers.  They send gold marks, reserving their thalers for home payments.  Government buys back the gold in foreign markets and the bankers go on exporting it.  The treasury thus undertakes to weave a Penelope's web without any Ulysses in the distance.  Already 20,000,000 marks have been sent abroad, the sixth part of all that has been coined.  To sum up, Germany has judged it prudent not to demonetize rapidly, while the success of a slow demonetization appears highly doubtful.

I do not believe that this process will go any further than it has already gone.  It is now arrested.  Besides that, an agitation in Great Britain and France already has arisen for the establishment of a bi-metallic currency.  Even Great Britain, that since 1816 has maintained the system of a single-unit and a token-coinage, is now discussing the question whether it will not be necessary for them, in self-defense, especially for their India commerce, to restore, to some degree at least, the double standard.  In France they have already provided that when specie payments are resumed they shall be resumed upon the double standard of fifteen and a half to one, which is now the legal relation of silver to gold in France;  and when specie payments are fully entered into, as they very soon will be, and probably can be now, the old law of the monetary conference will be enforced in France and all the Latin countries.  Besides that, Asia again is absorbing rapidly the silver of the world, and the forced demonetization of silver will be counteracted.  It is used now by two-thirds of mankind as the sole standard of value.  It is used by all nations as a token-coinage to a very large extent, as I have already shown.  It will soon be used to the extent of forty or fifty million dollars in the United States of America.  We now have nearly $20,000,000 to pay out, and can coin it at the rate of 2,000,000 a month;  so that we shall ourselves, in the execution of our law and of this law among others, use a large amount of silver, probably not less than sixty or seventy million dollars.  The absolute necessity of smaller coins will always maintain more or less of silver and make it absolutely necessary.  The utter ruin that would come to mankind, especially to the poorer nations, by the entire demonetization of silver cannot be estimated by us.  Take one-half of the solid money of the world out of existence;  take the sole standard of more than two-thirds of the human race, reduce it to a base metal, and the effect upon the commerce of the world would be incalculable.  It cannot be done;  it will not be done.  There is no danger of it.  These two metals, gold and silver, have traveled side by side from the beginning of time;  the records of human history do not go back beyond it.  They have varied, sometimes one and sometimes the other higher;  but they have gone on, gold the money of the rich, silver the money of the poor, the one to measure acquired wealth, the other to measure the daily necessities of life;  and, sir, no act of parliament, although it may disturb for a moment the relation of these two metals to each other, nothing but an act of God, can destroy the use of both these metals among the nations of mankind.

I will add some statistics from Dr. Soetbeer, published in Germany, of the proportionate values of gold and silver at different dates and epochs:

Some interesting notes have been published lately in Germany by Dr. Soetbeer on the variations in the proportionate values of gold and silver at different dates and epochs.  In ancient times the relative value of gold to silver was about one to thirteen and one-third, and toward the end of the old Roman Empire of the West it rose to about one to fourteen and one-half.  In the Middle Ages and down to the fifteenth century the standard was about sixteen of silver to one of gold;  but after the discovery of America the value of gold fell rapidly, until the proportion stood at ten and one-half to eleven of silver to one of gold, which relation was maintained with but little fluctuation during the sixteenth and beginning of the seventeenth century.  After that date gold began to rise again in value, and by the end of the seventeenth century the proportion had become one to fifteen.  The standard of comparative value fluctuated backward and forward at about that figure during the eighteenth century, and at the close silver was about fifteen and one-half.

Up to 1850 silver had never fallen so low as sixteen, while from 1850 to 1852, owing chiefly to French coinage operations and the absorption of silver for the double standard in that country, the price of that metal tended to advance slightly.  It was never higher than fifteen, but still it was considerably less than fifteen and one-half.  After 1859 the course of the price of silver tended downward by almost imperceptible steps;  but it was not until 1873 that the price began to be decidedly low;  it then fell to sixteen and eight one-hundredths in relation to gold, and by the end of 1875 had touched in London sixteen and eighty one-hundredths, or fifty-seven and eleven-sixteenths pence in London.

Perhaps I am wearying the Senate by these details;  but it seems to be necessary in the condition of the information on the subject that I should state them.  There are certain general conclusions which I draw from a reference to these statutes in various countries which I will briefly state.

First.  It is impossible in the nature of things to fix the precise value of silver and gold.  We have tried it three times and failed.

Second.  Whenever either coin is worth more in the market than the rate fixed by the law, it flees from the country.  That we have twice proved.  That is the admitted economic law.  It is the Gresham law ---a law of currency named from the name of its discoverer.  He wrote a book to show that always the poorer currency would drive out of circulation a superior currency;  and his book gave name to the theory that is called the law of Gresham.  It is the universal law of political economy:  that, whenever two metals or two moneys are in circulation, the least valuable will drive out the most valuable;  the latter will be exported.

The third proposition is that the example of several great European nations as well as of the United States proves that to prevent the depreciation of silver the tendency of modern nations is to issue it as a token coinage somewhat less in intrinsic value than gold, and maintain its value by issuing it only as needed, at par with the prevailing currency, and to make it a limited legal tender.  I may say that has been acted upon by every great Christian nation.  Russia and Austria have not yet gold coinage at all, but still they have their values based upon gold.

Fourth.  That the demonetizing of silver tends to add to the value of gold, and that though its relative value ebbs and flows it is more stable compared to gold than any other metal, grain, or production.  Its limit of variation for a century is between fifteen to seventeen for one in gold.

Fifth.  That both coins are indispensable, one for small and the other for large transactions.

Sixth.  That the causes of its decline are temporary.  It is still used by a great majority of mankind as the standard of value.  Its use in France and the United States will on resumption more than counteract its decline in Germany.

Seventh.  The general monetizing of silver now, when it is unnaturally depreciated, would be to invite to our country, in exchange for gold or bonds, all the silver of Europe, and at last it would leave us with a depreciated currency.

Eighth.  The decline of silver enables us now to exchange silver coin of the old standard for fractional currency, leaving the exchange optional with the holder, until we have the courage, as we now have the ability, to redeem it in gold.

Ninth.  More silver can be maintained at par than we have now of fractional currency.

Tenth.  The redemption of a part of our currency would advance its purchasing power, while the silver in circulation will counteract the contraction of the currency.

Whenever we have heretofore proposed any measure that looks to the redemption of our United States notes ---and I cannot but regard our failure to provide for them now, twelve years after the war, as a disgrace to American civilization--- when we seek to advance United States notes, it is said that we contract the currency and affect prices and a derangement of values.  Here we can pay out solid money, good money, money of the Revolution, money unchanged in value from the time of the Revolution to this hour, for the redemption of our United States notes without loss, without contraction;  and surely we cannot refuse to do it.  If we pay out the silver it enters into circulation and it takes the place of United States notes;  and why should we refuse to the holder of the United States notes the right to demand that of us which is now no more valuable than the note itself ?  It is sometimes said that nobody wants the silver dollar.  Try the people and see if they do not want it.  If they do not want it, then no harm is done.  I would not make any man take it.  I would not make any man who holds a greenback note payable in gold take the dollar in silver, because I would tell him beforehand the greenback some time probably in the future will be much more valuable than the dollar he gets;  but that is no reason why we should not give him the dollar if he wants it, and there can be no reason why we should not.

Now, Mr. President, that brings me, and very briefly, to the provisions of this bill.  It will be perceived that the Committee on Finance took the House bill as far as possible without alteration.  With deference to the House we made no change in the first and second sections, and if the House had not put in the third section, I for one would not have desired to change the bill as it was sent to us at all.  But they presented to us this difficult question of the double and single standard, and we were forced to consider it.  I have no doubt, perhaps I betray no secret when I say that the Committee on Finance would have been glad to have laid this question aside and considered it more fully;  but it was presented to us in the bill, and therefore we had to deal with it, I may say forcibly, against our will.  As it was before us, we could not get rid of it in any other way, and we cannot now unless the Senate should see proper to strike out the third section and risk a controversy with the House, which would probably produce longer delay.  Therefore we undertook to amend the third section so as to avoid the objections to it.

The first provision I wish to call the attention of the Senate to is that our amendments make no enlargement of the legal-tender quality of subsidiary coin.  We have left the subsidiary coin precisely where it was under the old law, unchanged, and it is clear that it should be unchanged.  To make the subsidiary coin a legal tender for $25 would utterly destroy our customs revenue, would raise the question of the payment of the interest on the public debt in the subsidiary coin, would evidently impair the public credit, and would be wrong in every sense of the word.  Besides that, it would be a departure from the example given to us by other intelligent nations that have acted upon every one of these questions.

The House of Representatives proposed a legal tender of $25.  We left it where it was, at $5, and I have here a letter from the Secretary of the Treasury showing in the most conclusive manner the evil results that would flow from the enlargement of the legal tender of subsidiary coins and its effect on the revenue.  I will not have it read, but may hand it to the reporter to be embodied in my remarks, so that Senators may have the benefit of reading it if they desire.

As to how much of it can be kept at par, I have already stated that, in my judgment, from fifty to sixty or seventy millions can be kept at par.

But the vital question presented by the amendments of the committee is the restoration of the silver dollar.  Why restore the silver dollar when it is now so depreciated by the events that I have named ?  Well, sir, the answer is that we have a large amount, some 400,000,000 of United States notes, which now are a legal tender for all purposes, and the time has arrived when we can redeem all these United States notes with the old dollar of the United States.  We do not create a dollar;  we simply provide for the issuing of the dollar.  The law was, as I have shown you, up to 1873, that this old dollar could be tendered for the payment of all debts;  but it was simply not coined because the silver dollar was worth more than the gold dollar.  Does that prevent us from coining it ?  Not in the least.  I will read you a short extract from Seyd on the very subject I am now speaking of, the importance of the American dollar in the commerce of the world;  and as he expresses it much better than I can, I think Senators will be better pleased to hear his statement:

What, indeed, could America risk in adopting silver again as a coadjutor to gold ?  What, considering the actual state of the question in the world, namely, that the majority of the nations adhere to the double or the silver valuation, does she not lose now in endeavoring to follow the footsteps of England ?  Would America do wrong in following the example of France, which maintains the five-francs silver piece ?  Germany is obliged to adopt the double valuation;  is the example a pernicious one ?

I think not;  I think that America, by deciding in favor of the double valuation, would not only save the world at large from an abyss, and prevent the accomplishment of a stupid general crime, whose authors humanity would some day learn to curse, but that she would advance her own material interests more than may be supposed possible, and that she may perchance take the lead in the intelligent and prudent organization of firm monetary systems.

The state of the whole question in the United States favors the reintroduction of the silver dollar.  It has not been abolished by law, consequently no legal enactment for its re-establishment and legal-tender rights is required.  All that is necessary is an act of Congress fixing the weight of the silver dollar at four hundred grains (399.9) of nine hundred fine, reducing its present weight by twelve and one half grains. ---Seyd's Metallic Currency of the United States, pages 56, 57.

This is the opinion of Mr. Seyd, an English writer, who is perfectly familiar with the whole subject, and who has lived in this country the most of his life.

There was one question of detail that came before the Committee on Finance upon which there was some difference of opinion:  what should be the dollar;  what should be the weight of the dollar ?  Should we take the gold value now of silver and make a new relative standard;  or should we take the French ratio of fifteen and a half to one;  or should we take the old ratio of fifteen to one;  or should we take the American dollar as it has stood from the foundation of the Government to this time !  It seems there was a mistake;  I do not know how to explain it.  The old dollar was intended to be sixteen to one;  but we know very well, if our arithmetics do not deceive us, that sixteen and a half multiplied by twenty-five and eight-tenths grains will make four hundred and twelve and eight-tenths;  and therefore it was an error in some way by somebody to make the old dollar which only four hundred and twelve and a half grains.  It was not very material, for it was a very small fraction;  but still the committee thought it was better to take the exact standard fixed by law, sixteen to one, and make the new silver dollar weigh exactly sixteen times the weight of one dollar of gold.  The gold dollar is twenty-five and eight-tenths grains, and the silver coin we have provided for is four hundred and twelve and eight-tenths instead of four hundred and twelve and a half grains.  I make this explanation because a New York paper says the Committee on Finance did not know what the old dollar was;  that the old dollar was four hundred and twelve and a half grains, and we have made it four hundred and twelve and eight-tenths, because we did not know better.  I give the editor my respects, and state that we did it for a reason.  The author, Mr. Seyd, that I have read, recommends, on the contrary, that we should adopt the French standard.  I am not sure but that it would be a very good thing to do if we were treating the question apart from all old customs and habits.  If it were a new question, I should say at once adopt the French standard, and make the dollar four hundred grains.  That would be exactly fifteen and a half to one.  But I would not do that.  I would not debase and degrade the dollar below its old standard merely for the purpose of assimilating it with the metric system of the French.  I think, therefore, the old dollar is the best dollar.

It has been also proposed to make the dollar to be issued equal to two half dollars of the subsidiary coin.  That would be only three hundred eighty-five and eight-tenths grains;  that would be to debase the coin.
---[ That would be 384 grains in a $1 coin;  that is what in 1872 the New York Chamber of Commerce and the National Board of Trade asked for;  that is what you told Senator Casserly on January 17, 1873, the bill proposed to do:  "This bill proposes a silver coinage exactly the same as the French, and what are called the associated nations of Europe, who have adopted the international standard of silver coinage;  that is, the dollar provided for by this bill is the precise equivalent of the five-franc piece.  It contains the same number of grams of silver;" ---but, somehow, now it is debasing the coin.
     You are working hard to make sure that nothing good will result from whatever bill Congress passes.  The "old dollar" was the 412½ grain coin, containing more silver than two half dollars, which caused the $1 coin to disappear.  Devious people made the "old dollar," produce disorganized currency.  Now you are proposing the "old dollar" to make sure that nothing good results from the attempt to remonetize silver ]
I have no doubt that if this dollar is now restored to its old standard, in all human probability the fluctuations that have gone on in one way against silver will after a while turn in favor of silver, and the dollar may come to the par of gold.  It has been done in the past;  it was done when it was provided for.  Whether that be so or not, I would not force anybody to take this silver dollar who does not desire to take it.  If anybody desires to surrender a note of ours past due, payable in gold when paid, for a silver dollar, because he is tired of waiting so long for payment, give him the silver dollar;  but I would not force him to take it, because the time will come when these notes of ours, I think, will be worth dollar for dollar i gold.  If a man prefers, rather than wait the uncertain time in the future, to take a dollar in silver, give him the opportunity to do it.

The question is to what extent should it be made a legal tender.  The House provided that it should be made a legal tender for $50.  There are serious objections to making silver a legal tender for $50.  I would prefer to leave it at $10;  but the House proposition made it a legal tender for customs duties and interest on the public debt.  That would plainly be a bad proposition.  It would drive gold out of the country.  If the silver dollar now, with its depreciated value, is made a legal tender for $50, you will have no gold whatever except in the mints and sub-treasuries of the United States.  Our experience has shown that fully;  and therefore the only way to maintain our silver coin at par in currency is to limit the amount either by the law of demand and supply or by the demand for silver coin in exchange for fractional currency and United States notes.  That will at least keep United States notes and fractional currency always up to the par of silver, and would not prevent the United States notes from rising above the par of silver when the people become satisfied that we were about to redeem or were preparing to redeem them in gold.  Therefore the committee fixed on the amount of $20 as a fair compromise.  I would greatly prefer to reduce it to $10;  but I am willing to vote for $20.  It is manifest that to make it $50 would entirely destroy our gold revenue, and probably cause the exportation of gold abroad and impair the volume of gold in the country.

It is objected that this measure is the entering wedge for the double standard;  and very good men, specie-paying men, have made this objection, and it is therefore proper to answer it.  I reply that we have always had a double standard, and generally to a greater extent than this bill allows.  Until three years ago the dollar was a full legal tender.  Since that time the United States have contracted no debt, and every existing debt could have been paid in dollars of that standard.  Does it injure any man to restore it now and limit its legal-tender quality to $20 ?

We are asked, then, why was the old dollar omitted in the act of 1873 ?  I answer that it was omitted practically by the act of 1853, by being undervalued.  It was formally omitted from the silver coinage by the act of 1873 because it was then too valuable for circulating coin, and was made to replace the Spanish milled dollar with a commercial coin.  Is there any reason why it should not be restored now, when we can use it as an agency for the redemption of United States notes ?

It is said that a silver coinage is in the interest of silver bullion and those who produce it.  Certain Senators have even been designated in the House of Representatives as owning bullion in the West;  "silver-clad Senators," I believe, has been the expression.  I hope it will be a benefit, not only to the producer of the silver, but to the people who use it as money.  I have always supported the policy of encouraging the production of iron, wool, and fabrics.  Why not also of silver ?  The most common and the meanest of arguments against a measure is that it will help somebody.  I am quite sure that this will help the body of the people;  and that is the only interest I have in it certainly.

But, sir, the House of Representatives have also made this silver coin a tender for duties and interest on the public debt.  I do not think it is necessary to waste much time about that.  Our duties are by law made payable in gold and are set aside as a sacred fund to pay the interest on the public debt and to provide for a sinking fund.

Mr. Bogy.  The law says "coin."  It does not say "gold."

Mr. Sherman.  I know that.  It is set aside, however, in coin.  Now, I ask the Senator, suppose we should receive silver coin into the Treasury of the United States in payment of duties, as it would be received almost exclusively in case $50 could be paid in silver, would you pay that silver money now, taking advantage of its depreciation, out to the public creditors who bought your bonds payable in gold coin of the present standard, weight, and fineness ?

Mr. Bogy.  No bonds are payable in gold that were issued before 1873;  not one.

Mr. Sherman.  I do not suppose any one would desire to raise the question whether they should be paid in gold.

Mr. Bogy.  That is another question;  but the obligation was "coin" without one single exception until 1873.

Mr. Sherman.  In 1862, when the act passed, there was no coin in the United States except gold coin.

Mr. Bogy.  Silver coin was just as much coin as gold at that time.

Mr. Sherman.  There was not any of it, and you would not pay it then;  you would not have paid the silver dollar then to the bond-holder, because the silver was worth more than gold.

I do not care to discuss that matter much further.  ---[Of course not]  I know one thing, that the House of Representatives --I have reason to argue it, and I think I know it outside of that-- never intended at all to interfere with our general law by which the customs duties are collected in gold, the change only being paid in silver, and that that gold should be used to redeem our promises.  And, sir, any intimation by Congress, any effort by Congress to impair the public debt or the honor of the public debt, or its full payment in gold coin, would, in my judgment, do more harm than all the silver that can be issued under this or under any other law can do good.  Anything that tends to destroy the public credit or the confidence of the creditors in our willingness and ability to pay, depreciates the value of our bonds, and brings them back to us for payment or for sale, and will prevent us from funding our debt ---[don't "fund" it, eliminate it !] at a lower rate of interest and availing ourselves of our present excellent credit.  Therefore I hope in this debate there will be no suggestion which in the mind of the most timid man can induce a fear that we shall avail ourselves of the present circumstances to pay his bond in some other standard than that of gold coin.  Therefore we except, from the operation of even the limited legal tender of the silver dollar here provided for customs duties.  The same reason applies also to the interest on the public debt, with this additional reason that the bill as it stands now discriminates against the small holders of bonds.  For instance, a man owns a thousand-dollar bond --a person in the country-- and he could be paid his interest in silver dollars, for it is less than $50 in one payment, while the capitalist abroad who collects his coupons through a bank presents them in hundreds and thousands.  He must be paid in gold coin by the bill as it passed the House, while the widow or small holders all over the United States who may hold small bonds would be paid their interest in silver coin.  I think it is a discrimination against the small holders of bonds in favor of those who hold large sums.  I take it, therefore, and I have no doubt that it was not the intention of the House to interfere with the law in this respect.

As to the legal-tender quality of the trade-dollar, I have already pointed out the necessity of changing the legal-tender quality or of abolishing the trade-dollar entirely.  I was rather disposed for one to abolish it entirely, as making confusion;  because we have two dollars so near each other.  But as a matter of course the people who have built up a trade on the trade-dollar ought not to be deprived of it, except for some good reason;  and we have required, in our amendments, that the trade-dollar shall be so different in its devices and emblems, that it can be readily distinguished from the general dollar.

Mr. Whyte.  May I ask the Senator from Ohio a single question in regard to that very point ?  The injustice of his amendment strikes me to be apparent against those persons who have sent silver bullion to the mints, and have been able to get no coin from the mints but the trade-dollars, and who have those trade-dollars on their hands now, coined at a time when the trade-dollar was a legal tender to a certain amount;  and now, while they have that money in their possession, you take away from them its value as a legal tender.

Mr. Sherman.  I have answered that as I went along.  The trade-dollar was only intended as a commercial dollar, as a convenient mode of putting silver bullion for the benefit of depositors.

Mr. Whyte.  Still it was a legal tender to a certain extent.

Mr. Sherman.  I know;  but we can change that.  It is no harm to change that;  and it is entirely within our power to change it.  It does not do them any harm.  These trade-dollars are worth more in China than they are in the United States to-day;  so that as a matter of course the holders will have the benefit of the China market.

Mr. Howe.  They are worth more than the legal-tender dollar here.

Mr. Sherman.  Certainly;  and everybody will take the trade-dollar for another silver dollar.

Mr. Whyte.  But you cannot sell it on this coast.

Mr. Sherman.  I guarantee that I will find plenty of people in the city of Baltimore who will agree to take all the trade-dollars, and give silver dollars for them.

Mr. Whyte.  I can show you some of them in Baltimore now.

Mr. Sherman.  I will get some one over there to do it.  There is no weight in that point.  The trade-dollar is worth 3 or 4 per cent. more than the silver dollar.

Mr. President, some objection might have been made to this bill if we had authorized the Secretary of the Treasury to issue bonds to buy the bullion to make these dollars, but we did not.  On the contrary, we simply carry into effect the spirit of the law of 1862, which authorized the sinking fund to be used in payment of any portion of the public debt, and to the extent that the sinking fund can be used to buy bullion and coin silver dollars with which to redeem fractional currency and redeem United States notes --to that extent the sinking fund may be used.  That is a wise provision at all events, because now our bonds are so exceptionally high that under the sinking-fund law the Secretary has got, in buying bonds, to pay 18 per cent. premium, when there is a debt existing against the United States which must some time be paid in coin, which he will be at liberty under this bill to buy in silver and extinguish and put it out of existence, and add to the sinking fund.

Now, Mr. President, I am afraid I have wearied the Senate, but I have gone through this matter simply as a business matter.  The exchange of silver coin for silver bullion is a profit to the Government of the United States.  On the issuing of silver dollars the profit is several per cent.;  on the issuing of subsidiary coin it is 6 per cent. more;  and this profit more than pays all the expenses of the mints, saves all the expense of printing your fractional currency.  The actual profit under this law will carry into the Treasury a surplus over and above all the expenses of the mints.

There are but two things more that are needed to make this bill, in my judgment, a complete financial measure.  They are, first, to authorize any holder of greenbacks to convert them at his will and pleasure into a bond of the United States.  Would to God that we had the courage now, without regard to party, to do this and give to every holder of these notes of ours the right at his will to convert them into a 4 per cent. bond running forty years !  No considerable amount would be converted, in the present state of the market, into bonds now.  Some would be.  Those persons desiring a perfectly safe and long investment might convert their notes into 4 per cent. bonds in small sums;  but as credit rises, and it is rising every day, these 4 per cent. bonds will advance to par in gold.  What I would desire next is to authorize the Secretary of the Treasury to convert our 6 per cent. bonds into 4½ per cent. thirty-year bonds.  A bill has passed the Senate for that purpose, but yet sleeps in the House.  Then authorize the holder of the notes to convert them at his will and pleasure into a 4 per cent. forty-year bond and there stop, and you will reach specie payments without a ripple on the current.  These two bonds would approach each other in value;  your notes would gradually be retired;  silver would take their place --its natural place in the currency of the country.  We are producing the silver, and our own products would be converted into our currency.  Then our notes would gradually rise to par in gold.  Then the circle of the rebellion, or the revolution, as our southern friends may call it --I prefer to call it by the old-fashioned name-- would be finished---

Mr. Davis.  Would you withdraw the greenbacks ?

Mr. Sherman.  As soon as greenbacks were at par with gold I would keep them afloat;  but that is not in this bill.  I merely alluded to it in passing.

There is another object that could be desired, and I think, if the United States would now lead off in it, it would undoubtedly be accomplished;  that is to establish by international convention a unit of money of accounts, both of gold and silver.  Advances have already been made to this Government by Great Britain, and a proposition is now pending looking to that end;  and there is no doubt whatever that Germany would be glad to enter into the same international relation that was proposed in 1867, and which she then defeated and rejected.  The difficulties and embarrassments in which Germany is now involved from the unforeseen effect of her own measures would make her eager to enter into a general monetary union or the extension of the Paris conference so as to make everywhere fifteen and a half ounces of silver equal to one of gold among all the nations of the world;  to limit silver coinage to the token coinage or small change of the people, and make gold the standard of value, but silver the standard of labor and all minor accounts.  By a convention between the leading nations, including Great Britain, France, Germany, Russia, and the United States, which must find the gold and silver to carry this arrangement into effect, you would have a monetary unit, and you would then be free from the oscillations that we have met in our whole history, of gold disappearing and silver disappearing by turns, destroying the value of contracts and deranging all our monetary affairs.

Sir, I do not hope to accomplish these things now;  but I see in this bill an opportunity to accomplish some good;  and I believe that true statesmanship consists in doing the good you can, without seeking the unattainable, and therefore doing no good at all.  Here we have an opportunity to monetize a portion of our silver product;  to redeem a portion of our United States notes;  to come back toward specie payments --all in the right direction.  And the fact that this bill does not accomplish all I desire is no reason why I should delay it, oppose it, or antagonize it.

Mr. Morton.  Mr. President, I desire to submit a few remarks rather in the nature of inquiries than discussion of this subject, for I have not had time to examine it.

I shall be glad to see silver introduced into the circulation of this country largely, and I shall be glad to see the proper silver coin made a legal tender for a much larger sum than is authorized by this bill;  but there are several questions which I should like to have the Senator from Ohio, who has been paying much attention to this subject, answer.  I sent this morning to an officer of the Treasury who is informed on the subject to obtain certain statements of values which I think it important that the Senate should consider in undertaking to decide this question.

In the first place, what is the value of the present silver coin;  the old coinage and that which is now lying in the Treasury that has just come from our mints, which is still authorized and which is to go on after this bill shall have become a law;  the coinage of half dollars, quarters, twenty-cent pieces, and ten-cent pieces ?  Taking the gold dollar as the standard of value, this mass of silver coin is to-day worth eighty-four and five-eighths cents on the dollar, a small fraction over eighty-four and a half cents.

Mr. Sherman.  The subsidiary coin ?

Mr. Morton.  The subsidiary coin;  and its currency value today in greenbacks is ninety-five and eight-tenths cents.  The new silver dollar proposed to be issued by this bill the Senator from Ohio says is the revolutionary dollar.  I do not know that there is any merit to be given to it on that account;  for when it was made the dollar, gold and silver bore a different relation to each other from what they do now.  Then that dollar was intended to be the equivalent of gold, so that the gold dollar and the silver dollar should be interchangeable.  This dollar was established first upon that hypothesis.  The dollar provided for in the third section of this bill may, therefore, be considered a new one;  and its value is as follows:  It contains according to this bill 412.8 grains of standard silver, or 371.52 pure silver;  and that dollar when it is issued will be worth, according to the gold dollar, 90.7 cents.  It will be nine cents and three mills under the gold par as soon as it comes into the world.  It is depreciated coin to begin with.

Mr. Bogy.  It is supposed that this depreciation will disappear when it is made a legal tender.  Not being so now is the reason it is below the value of gold.

Mr. Morton.  Making this new dollar (which we will say to begin with is ten cents under par) a legal tender for $20 may add something to its value, but very little.  Your legal-tender notes are a legal tender for all amounts, and they are all the money you now have to pay your debts with, and yet to-day they are 12 per cent. under par;  and this new dollar that is to start out with a permanent depreciation of nine cents and three mills cannot be brought to par, nor will it have more than one or two cents added to it, in my judgment, by making it a legal tender for the small sum of $20.  The currency value of this new dollar in greenbacks would be $1.027 to begin with.  These values are based on the present price of silver, fifty-three and one-half pence per ounce standard, and the premium of gold 13¼, as it was last week.  With silver at fifty-three and one-half pence sterling or $1.172 per ounce fine, a full-valued silver-coin dollar would have to contain 454.59 grains of standard silver or 409.13 grains of pure silver.  This dollar will contain 371.52 grains of pure silver, and to make it equal to gold it would have to contain 409.13 grains of pure silver.

I will call the attention of the Senator from Ohio, and I want him to inform me --perhaps everybody else understands it-- what is to be the benefit of this coin.  We shall then have four different standards of value in circulation:  First, we shall have the subsidiary coin, some twenty millions of which are now in the Treasury, worth eighty-four and five-eights cents to-day;  we shall then have the greenbacks, which are to-day worth eighty-eight cents;  the fractional currency, being convertible into greenbacks, is worth the same sum, and is worth four cents more to-day than this subsidiary coin which we are now making, half dollars and quarters;  and then we shall have this new coin, worth ninety and seven-tenths cents.  That is the third currency we shall have in point of value;  and then, fourth, we shall have the gold coin, worth one hundred cents.  Here we have four different currencies differing in value, ranging from eighty-four to one hundred cents on the dollar.

Mr. President, what is to be the value of this coin, or rather what is to be the use of it;  what is the office it is to perform ?  The fourth section of this bill authorizes the Secretary of the Treasury to exchange it for an equal amount of United States notes, greenbacks.  The coin will start out worth ninety and seven-tenths cents, while the greenbacks to-day are worth eighty-eight cents.  If there were $10,000,000 of this coin in the Treasury to-morrow to be converted into greenbacks there would be a great rush for it, because the holders of greenbacks would thereby realize two cents and seven mills by converting their greenbacks into the coin, and then they would take the coin to the melting-pot, get bullion, and sell it as bullion.  But when the greenback gets above ninety-one cents, gets three mills above the value of this dollar which starts out at ninety cents and seven mills, there is no longer any conversion.  No man will convert a greenback worth ninety-one cents into a currency worth ninety cents and seven mills;  and if the greenback gradually appreciates, goes up to ninety-two cents, ninety-three cents, ninety-four cents, as we hope it will do and expect it will do, under the law we have passed, who will convert his greenbacks into this coin ?  So far as the use of this coin is concerned, after the greenbacks are worth ninety-one cents there would be no use of it for the purpose of conversion.  What is the next use to be made of this coin by the Secretary of the Treasury ?

And he is authorized to exchange such silver coin at its nominal value for silver bullion at the market value, to be ascertained and announced from time to time by the Director of the Mint, with the approval of the Secretary of the Treasury.

The Secretary is authorized to exchange these new coins, worth ninety cents and seven mills, for silver bullion at its market value and at the nominal value of the coin.  What is the nominal value of the coin ?  One hundred cents.  What is its actual value ?  Ninety cents.  What is the market value of bullion ?  It is so much in gold.  Now the idea that the Secretary of the Treasury can buy one dollar's worth of silver bullion in gold at the market value (for that is the way bullion is measured) for the nominal value of a coin that is worth only ninety cents and seven mills, is a thing I cannot understand.  I hope my friend can explain this.  I want to state that again.  This bill authorizes the Secretary of the Treasury to exchange these coins at their nominal value --that is, their face value-- for silver bullion at the market price.  Who will do it ?  Will a man sell a gold dollar's worth of bullion for a silver dollar worth only ninety cents ?  I cannot understand it.

If we come to specie payments, as I hope we shall, here is a coin that is permanently depreciated.  We talk about having a uniform currency.  It is not subsidiary coin;  it is not change.  This dollar cannot be change, unless you abolish one-dollar bills.  If we have nothing less than a two-dollar bill, then a silver dollar would be in the nature of change;  but as long as you have one-dollar bills, either bank-notes or greenbacks, a silver dollar is not change.

To begin with, here is a difference of six cents in these two kinds of coin.  I call the attention of the Senate to that.  We now have silver coin worth eighty-four and five-eighths cents on the dollar.  It is proposed now to make a new coin worth ninety and seven-tenths cents.  There will be a difference of six cents and a little over one mill between these two coins to start with.  Will these silver coins be interchangeable ?  Certainly not.  The man who has these silver dollars worth ninety cents and seven mills will not exchange them for silver coins worth eighty-four and five-eighths cents, unless it is a matter of sheer necessity.  Then these silver coins will not be interchangeable.  The man who has subsidiary silver and wants silver dollars cannot exchange them either.  Why ?  Because he proposes to give that which is worth eighty-four and one-half cents even for that which is worth ninety and seven-tenths cents.  The man who holds the silver coin worth ninety and seven-tenths cents will not be able to see it in that light.  You have two silver coins of different value and not interchangeable any more than gold and greenbacks are interchangeable.  Why can you not exchange a greenback for gold coin even ?  Because one is worth more than the other;  and when you have these two silver coins of different value they are not interchangeable, and you have confusion thrice confounded.  The merchant in New York will have to regulate his stock in this way:

"I will sell my goods for so much in subsidiary coin worth eighty-four and one-half cents;  I will sell my goods for so much in greenbacks worth eighty-eight;  I will sell my goods for so much in silver coin worth ninety and seven-tenths cents, and I will sell them for another price in gold worth one hundred cents on the dollar."

Instead of having a uniform currency you create more confusion, it seems to me, than there is now.

Mr. President, I should like to have the attention of the Senator from Ohio to this question.  If we are to make new silver coins, why not make them of the value of gold coin ?  Put enough silver into them and make them the equivalent of gold coin, so that they may circulate together and be interchangeable the one for the other.  Then you can make it a legal tender for a large amount.  I understand the Senator to say to-day that the depreciation of silver is not the result of the increased quantity, but of the action in Germany, the demonetization of silver;  and he thinks that has gone as far as it will go;  and therefore the depreciation of silver has ceased, and.  the prospect is that silver will increase in value instead of declining in value from this time.  If we can make a silver coinage that is the equivalent of gold coin or very near it, that will circulate alongside of the gold coin, you can make that a legal tender for a much larger sum than $20.

There was one question that I wanted to ask the Senator as he went along, and I will ask him now, if he will answer it.  What is the difference between the value of the silver coin of Germany and the gold coin;  take five thalers in silver and some gold coin representing the same sum, and I want to know what is the actual difference in the bullion value of the two coins !

Mr. Sherman.  I thought my friend was here all the time I spoke, and so would have saved me the necessity of answering these questions;  but I can answer every one of them seriatim, and, reversing the order in which he puts them, I will answer the last first.

He asks me what is the standard value of the German coins.  I stated two or three times in the course of my remarks that it was fifteen and a half to one.  That is now the legal fixed value of German silver coin.  Fifteen and a half ounces of silver coin are issued as the equivalent of one ounce of gold coin.  That is the German relation.  Ours, however, was sixteen ounces of silver coin to one of gold coin, and our silver coin is worth more than the German coin;  and yet theirs is at par in gold.

Now I will answer the next question.  The Senator talks about the value of the subsidiary coin as eighty-four cents.  Well, it is worth eighty-four cents for bullion no doubt;  but as money it is worth a good deal more.  To the extent of $5 it is worth gold.  The subsidiary coin is received for customs to the extent of $5.  It is worth greenbacks always any way.  If it is not, try the people and see whether they will take it for greenbacks or not.  The Senator's idea is a confounding of the value of silver as bullion and its value as money.  Let us try it on paper.  What is the value of the paper in a dollar bill ?  About one-tenth of one mill.  As bullion it is worth one-tenth of a mill;  but as money it is worth eighty-nine cents, my friend says.  Silver is worth as much as money as paper money;  certainly it cannot be worth less.  The silver dollar we provide in this bill is worth 2 per cent. more than paper money is to-day, as my friend says.  Therefore, in any way you take it, the silver money is worth more than paper.  As bullion our silver is worth eighty-four cents on the dollar, and our paper is worth one-tenth of one mill;  while as money they would naturally be in the same relation to each other.

In regard to the other question, the Secretary of the Treasury is authorized to issue these silver coins.  As a matter of course, that is the exercise of discretionary power.  He would issue them probably;  and the notes would advance up to par with the silver coin.  He would not probably pay them out until they were at par.  When they were, he would pay them out to the extent that he had the silver on hand, to the extent that he could redeem the notes, and every note that he redeemed would add to the value of the remaining notes without diminishing the value of the silver.

But the Senator says, Why not make the silver dollar of the full value of the gold coin !  The answer is that if we do that to-day, to-morrow it may change;  the silver may go down or go up, and in either event it would be demonetized.  The only way you can keep two coins in circulation together is by making one tributary to the other by limiting the amount, by limiting the legal-tender quality.  In this way you keep the two both in circulation, and although their bullion value may change, their money value never changes.  In England the shilling, worth only twenty-two cents, goes every day for gold and is exchanged for gold.  The silver is worth as bullion twenty-two cents in the shilling, but it is worth twenty-four and three-tenths cents for money.  My friend certainly ought to perceive the difference.  Now the paper is not worth anything as bullion except the lamp-black and rags, but it is worth whatever the law fixes on it as money.

But my friend cannot see how the Director of the Mint can purchase bullion under this law.  He does it now under the same law;  that is, he has bought this bullion at so much an ounce.  A man comes and says, "I have got one hundred ounces of bullion;  what will you give me for it ?"  The Director of the Mint says, "The price to-day is $1.03 in gold per ounce;  but if you will take currency I will give you one hundred and fourteen cents for it."  Then the man says, "I will take it in gold;  I prefer to sell it in gold;"  or, "I will take it in currency;"  the two having a fixed value day by day;  and he sells an ounce of silver for one hundred and fourteen cents in currency.  What does the Director of the Mint do with that ounce ?  He does not pay that ounce out at the same rate he gets it for.  On the contrary, he coins that ounce of silver into $1.28 in money, pays it out in money, giving the man back only $1.14 in currency.  That is what they do in England every day.  They buy silver bullion of everybody for so much, sixty-six shillings for a pound sterling;  but when they come to pay him for it they only pay him sixty-two shillings, keeping the balance as seigniorage.  We do the same.  That is the way we have bought all our gold and silver bullion since the organization of the Government, buying from private dealers at the market price and paying them in our own money at the money price.  If my friend will keep in view the difference between the bullion value and the money value, he will have no difficulty in answering the question.

I believe I have now answered all the questions he put.

Mr. Morton.  I suggest to my friend that he has missed the point entirely, I think.  Now he says the bullion value of a greenback dollar is one-tenth of one mill.  Is that any answer ?  What makes the greenback dollar to-day worth eighty-eight cents ?  Because of the promise of the Government to redeem it in coin, a promise that it is bound to carry out.  That is what makes the greenback dollar worth eighty-eight cents to-day.  Why are two silver half-dollars worth only eighty-four cents ?  It is because of the quantity of silver bullion that is in that dollar.  When you come to compare gold coin and silver coin you estimate the relative value of the amount of bullion that is in each.  My friend says there is a difference between the bullion value and the money value.  What is that difference ?  The subsidiary coin is a legal tender for $5 and the greenback is a legal tender for any amount;  but yet that does not make the legal-tender equal in value to gold and making the subsidiary coin a legal tender for $5 does not make it equivalent to the greenback that is worth eighty-eight cents when its intrinsic worth is only eighty-four cents.  The point that I asked in regard to the German and French coin was this:  What is the actual value of this coin ?

Mr. Sherman.  Fifteen and a half to one.

Mr. Morton.  But that still is not answering the question.  I hold in one hand a German silver coin calling for $5;  I hold in the other a German gold coin calling for $5.  I want to know what is the actual difference in the intrinsic value of these two coins.  In this country if I take $5 in silver and put it in one hand, and a gold five-dollar piece in the other, the actual difference in intrinsic value is nearly sixteen cents --fifteen and a half cents;  and I want to know what the difference in the intrinsic value between $5 in a German silver coin and $5 in a German gold coin is.  That is the point.  The Senator says that in England there is a difference of nearly 6 per cent. between the shilling and the gold coin in its intrinsic value, and that the shilling still passes for twenty-four and three-tenths cents in common circulation.  That may be as a mere matter of change in common use;  but that is a small difference compared to what we have got.  We have got nearly sixteen cents to begin with, and yet we talk about honest money.  We make a coin sixteen cents depreciated, to begin with, the equivalent of a gold coin worth one hundred cents, and are here proposing to make a coin almost 10 per cent. depreciated the equal of a gold coin.  Talking about honest money, it seems to me that is not much more honest than the greenback which we have heard denounced so much, and the failure to redeem which, we are told, is the disgrace of the age and of our civilization.

I want to see a uniform currency;  and if we are to have a silver currency and a silver dollar, why not make that silver dollar the value of the gold dollar, or so near it, perhaps saving out enough for the cost of coinage and the waste, say about one cent and a quarter, that they shall be interchangeable, that they will pass side by side in the commerce and trade of the country !  Then the silver coin would not go abroad because it is not the standard over there where they have taken gold.  Being a shade less than gold coin in point of value, it would not be its equivalent for circulation;  but in common circulation, if you will put them within a cent or two of each other, they will go for each other and exchange with each other.  I can remember when before the war the five-franc piece, worth only ninety-five cents, was actually received for one dollar in circulation;  and the silver dollar, worth ninety eight cents, that is to say the ninety-eight cents of silver bullion in it being in the commerce of the world worth two cents less than the gold dollar, would still pass in common circulation along with gold coin of this country and became a part of the permanent circulation of this country;  but when it is depreciated sixteen cents, as it is now with our present coin, or nearly ten cents with this new coin, they never will go together.  There will be no use for this new silver coin.  It will not float along with your greenbacks after the greenback gets over ninety-one.  It never will circulate alongside of the gold dollar.  What is the use of it ?  What office is it to perform ?  If we are to have a measure, let it be a practical measure.  I should like to see a silver coin adapted to the new state of things.  When this old coin was first authorized by law in 1792 the value of silver was different.  It has changed and perhaps permanently changed.  Why not adapt ourselves to the change ?  We cannot undo that change.  The Senator says perhaps the value of silver will go back.  It may, but it is not likely to do so in our life-time.  I hope it may appreciate.

Mr. Sherman.  I thought I assured the Senator from Indiana many times that our silver coin is now worth more, ounce per ounce, than that of any nation in the world.  Did he not hear me say that to-day our silver coin is worth more and the dollar we provide in this bill is worth more than the coin of Germany, or the coin of France, or the coin of England, or the coin of any other nation;  and yet the coin of these nations is maintained at par in gold.  The people of California and Texas who use our silver dollars, although they are worth as bullion only eighty-four cents, pay gold coin for them, and they cannot get them in any other way, because we being the only makers can control our sales of them so as to keep them at any standard we may fix.  So, we being the only makers, the United States may convert lampblack and rags, worth one-tenth of one-mill, into a note worth a dollar or very nearly that.  That is all there is of it.  The Senator from Indiana certainly ought to see that.

Mr. Morton.  One word.  The greenback, although made of lampblack and rags, has the promise of the Government to redeem it in gold at par.  The silver dollar worth ninety cents to begin with is not to be redeemed;  it is never to be worth more than ninety cents.  That is the difference.

Mr. Morrill, of Vermont.  Mr. President, I was not aware that this question would come up this morning;  and therefore I am not prepared to go into it at length, and, after the interesting and perhaps technical speech of the Senator from Ohio, it is probably less necessary;  but let me congratulate the Senate and the country upon the sound position taken by the Senator from Indiana [Mr. Morton];  and I hope my indorsement will not injure him.

I most cordially agree with the Senator from Ohio in being ready to circulate a larger amount of silver, provided we can raise it so that it shall be equal to the standard of gold.  It seems to me that the Senator from Ohio, in making his argument, has attempted rather a wide straddle, to make it include a double circulation of gold and silver;  and yet his argument, if it is worth anything, is worth most in favor of a change to a silver currency alone.

This bill appears to me a very incongruous one.  It comes here with a proposition at the head to supply a deficiency in the Treasury for the printing of legal-tender notes;  and yet attached to it is a proposition that is to revolutionize our whole established custom from the foundation of the Government in relation to legal tender in coin;  and I regret to say that, when I see the Senator from Ohio advocating a bill like this, I think we are right on the brink of Niagara;  we are just about ready to go over.  What is the proposition here ?  The proposition is to make silver dollars a legal tender, the House proposition to the amount of $50 and the amendment to the extent of $20.  I admit that this bill will not accomplish the main purpose or, if not the purpose, the ultimate result without further and additional legislation;  but I say that it is a blundering attempt to introduce nothing but silver as the legal tender of the country and to utterly abolish the use of gold.  When we have taken this step, the next will be at less cost for a greater introduction of the system of silver legal tender.

The Senator from Ohio admits in his argument, and in the authorities he cites, that in all cases the currency of less value will drive out of practical use the currency of greater value.  Therefore, if silver shall be introduced now at its present value, it will, as a matter of course, drive out gold.  And yet the Senator says that this is the same identical coin that was started in the Revolution.  Is not that rather an unfair statement when he knows that ever since the introduction of the trade-dollar silver has gone down from 103 to 91 ?  Between the fifteenth and sixteenth centuries the price of silver, after the discovery of the mines of Potosi and other mines in Mexico and Peru, went down 60 per cent.  It has gone down within a few years some 15 or 16 per cent.  We know that all over our western country, in Montana as well as Nevada, there are very valuable silver mines that are increasing the product much more largely than the discovery of the mines in Mexico and Peru did.  Those mines produced to the extent of $12,000,000 to $20,000,000 each, annually;  and yet the mines we have in Nevada exceed them beyond all comparison.

I am quite ready to accede to the proposition of making a double currency, provided it can be made equivalent one for the other, but I am utterly averse to the attempt to introduce two currencies, one of which shall be 10 or 12 or 15 per cent. less than the other.

The Senator from Ohio maintains that the silver currency of Europe is now at par, but it seems to me he gave us the facts which showed conclusively why it was kept at par: simply because the amount was limited.

Now, so far as the exchange of silver for our fractional currency is concerned, I am heartily and cordially in favor of it.  I think it ought to have been done before.  That would give us between $40,000,000 and $50,000,000 in circulation of the subsidiary coinage, and these, being mere tokens of money, would pass current and be kept at par;  but the Senator from Ohio has no clause in this bill limiting the amount.  It is merely limited by the proposition to make $20 or $50 the amount that shall be tendered in any one sum as legal tender.

It seems to me that this is altogether too grave a question to be tacked on to a little deficiency bill.  It never ought to have been here except as a separate and independent proposition, to be thoroughly considered and discussed by all Senators.  There are many here who could contribute some knowledge, some valuable information on this subject, and it is in my opinion wrong, radically wrong, to attempt to force a measure of this kind through upon a deficiency bill.

Mr. President, I do not like to delay the Senate when I have not even at hand the documents that I have at home on this subject, and I shall not detain the Senate this morning, for I have no idea that this bill is going to pass to-day, or to-morrow, or even next week.  It will have to be thoroughly discussed and considered before a question involving all the points that this bill involves can be passed by this body, I am very confident.

Mr. Bogy.  Mr. President, I think it very possible that I am the only Senator who is out and out in favor of making silver a legal tender without any limit whatsoever;  and it is my wish at the proper time to give my views upon that subject.  Enough has been said to-day by the different Senators who have spoken to show the magnitude of the question, and the question is more important to us than to any other people of the world, and more important at this time, when we consider our large amount of paper issue, our large amount of bonded debt, the condition that we are in of non-resumption, the attempt that we are making to resume at an early day, the fact that there is in this country but a limited amount of gold to redeem a very large amount of paper money, the fact that the balance of trade is largely against us every year, and the further fact that we have to provide in coin every year an amount upward of $100,000,000 to pay the debt which we owe, the debt which is owing by the Federal Government, by the State governments, by the city governments, by individuals, and by railroad companies.  All these combined make this question, as was well said by the Senator from Ohio at the outset of his speech, the most important in the range of political science.

Again, we see it assumes the form of a constitutional question, and a very nice question.  Has the Congress of the United States the power to say what shall and what shall not be a legal tender in execution of contracts between the citizens of each State ?  That is a question which is worthy of discussion.  The Constitution says that "no State shall make anything but gold and silver coin a tender in payment of debts."  That being so, clearly each State has the power to make "gold and silver," not "gold or silver," a legal tender.  That being so, can the Congress restrain that ?  I say the subject is worthy of discussion.  I hold that it is not impossible to make silver as a currency equal to gold.  I hold that it is equal to gold to-day in all countries where the double standard is recognized.  While it may be true and is true that gold intrinsically is more valuable than silver, nevertheless, if you establish the ratio between the two for all purposes for which money is used in trade and in commerce, one will be as good as the other.

The Senator from Ohio alluded a while ago to the fact that the public credit is of so delicate a nature that the mere whispering in this body that we had the most distant idea of paying our obligations in silver would affect the public credit.  That may be so;  nevertheless it is always well to face the dangers that may exist, nationally and individually, and not to skulk.  Now the fact is that all our obligations, without one single exception, up to the year 1873 are not payable in gold;  they are payable in "coin."  It is a further fact that the duties are not required to be collected in gold, although that has been said not once but a thousand times.  The duties are to be paid in "coin."  It is a further fact, which cannot be successfully disputed, that at the time the law was passed coin in this country was composed of two well-known metals, gold and silver, and therefore the duties could be paid as well in one metal as in the other, as well in silver as in gold.  Since 1873 we have made our bonds payable in gold, but up to that time they were not.

Mr. President, I do not rise at this time to discuss the subject.  I can very well see that the Senate is somewhat weary.  I desire to do so at a future day, and I must hope that the Senator from Ohio will not urge his bill to a vote to-day.  The subject is too important;  it is too vast and too complicated;  and not only to-day, but it is a subject which should be discussed with care and with great labor.  We did commit a blunder once in regard to this very question.  In 1873 the silver money of this country was demonetized by an amendment to a bill not germane to the subject without any discussion in this body or out of this body, by the public press or by anybody in this country.  By a mere amendment to a bill regulating the Mint the silver coinage of this country was demonetized, and gold was made the only standard and the gold dollar the unit of value.  I say it was a very great mistake, and we have been laboring from that time to the present under that mistake.  It can be demonstrated, I think, that we in this country can freely part with our gold which we annually produce from our mines, and if we retain nothing but silver as the circulating medium of this country the nation would not be injured, if we had enough silver.  With 40,000,000 of people in this country we could very well, without suffering any great bad effects, use $400,000,000 of silver coin.  I say more, that we could very well afford to part with our gold to pay off the balance against us annually which we owe to foreign nations and retain our silver;  and unless we do increase the basis of our metallic money we cannot.  The production of gold to-day is not equal to the export of gold from this nation;  and it is a question of a very few years when the last gold dollar will be on its way from the shores of this country to the shores of the Old World.  These are all great facts which should be discussed.

The speech of the Senator from Ohio was certainly something very remarkable and very singular.  I admit its ability and I admit the fact that he has well and laboriously investigated the subject.  I have no question about that;  but, while be advocates in an able way the utility, the value, the wisdom of the double standard, he yet concludes by advocating a bill which is not the double standard.  It is of very little consequence as a financial proposition that you make silver a legal tender for $20.  That will absorb but very little money.  It will not relieve the wants of the people;  it is too small.

I hold that silver and gold are the money of the Constitution and that it is not competent for Congress to restrain it.  It is not within the power of Congress to prevent silver from being a legal tender.  I hold that you can to-day go to the custom-house and tender your duties in silver, and if the question was brought before the Supreme Court of the United States the tender would be held to be a legal tender.  I have no doubt of it.  If these legal propositions are true, let us not try to avoid the discussion;  let us meet them.  If they are not true, let them be proved not to be true.  This subject was discussed at the very beginning of the Government.  At the time the Mint was created in 1792 the subject was discussed by the ablest financial mind of that day, Mr. Hamilton, and, for reasons given in that remarkably able report of his, silver and gold were looked upon as the two royal precious metals for us to use in this country.

Mr. President, I do not know exactly how to go at the subject.  I am not in favor of voting on this bill to-day.  I will therefore move, if it is a proper motion, that the subject be postponed until Thursday week.

Mr. Sherman.  I wish to state to the Senate what I know officially, that the passage of the first and second sections of this bill immediately is very important;  that the country at large is getting scarce of change.  As a matter of course, under the law as it now stands, the Treasury cannot issue fractional currency, because they have no appropriation to print it;  nor have they issued the silver coin, and there is no appropriation to print United States notes.  So there is a necessity for passing the first and second sections of this bill.  I therefore venture to suggest whether we cannot, by unanimous consent, pass the first and second sections of the bill, leaving out the third section, promising that the Committee on Finance will consider the matter and report to the Senate on that subject, so that it may be considered.

Mr. Bogy.  I have never yet seen the necessity of the first section of this bill;  because, if I understand the subject at all, the Secretary of the Treasury is now authorized to issue silver coin in lieu of fractional currency.

Mr. Sherman.  The first section of the bill appropriates money to enable him to make and issue United States notes.  They have no money now;  the whole Printing Bureau is stopped.  As for the silver coin, I suppose---

Mr. Bogy.  I have never seen the policy of that bill.  They have $15,000,000 now;  why not issue that to redeem the fractional currency ?  I do not see the utility of that section.

Mr. Morrill, of Vermont.  There are nearly one hundred national banks without notes who want them.

Mr. Bogy.  But we must understand each other.  The passage of this law is not going to put any money into the Treasury.  You have fifteen millions there now;  no more, no less;  he is authorized to pay that out.

Mr. Sherman.  I have been unfortunate in making myself understood.  I say there is an immediate necessity for the passage of the first and second sections of the bill;  and I am endeavoring to suggest a mode in which the third section may be reserved and the Senator debate it to his heart's content.  But the first and second sections, together with an amendment in regard to national banks, ought to be adopted;  and I think the House will agree to that, reserving the consideration of the legal-tender question for another bill.

The Presiding Officer, (Mr. Ingalls in the chair.)  Does the Senator propose to amend the bill ?

Mr. Withers.  I ask the Senator if it is possible to do that without taking out the third section.

Mr. Sherman.  Certainly not;  and I was about to propose to strike out the third section of the bill and pass the first and second sections, and then take up the subject of the third section as an independent proposition.

Mr. Bogy.  I do not want your speech to go without an answer.  It is too good a speech to lose.

Mr. Sherman.  I will promise my friend a chance to make a speech on the very day he names.

The Presiding Officer.  The motion made by the Senator from Missouri to postpone to a day certain takes precedence.

Mr. Bogy.  Just one word.  The first section makes an appropriation to the amount of 163,000, I think, for the printing of this fractional currency.  I presume that is the fact.

Mr. Sherman.  No, not fractional currency, but United States notes ---greenbacks.

Mr. Morrill, of Maine.  It is apparent from the communication of the Comptroller of the Currency that it is very important the first section of the bill should pass.  I do not speak of anything more than that section which was referred to the Committee on Appropriations, and to which that committee have authorized me to propose an amendment.  It is vastly important that that part of the bill should pass, in order to supply the means for printing the legal-tender notes and also to supply the national banks with currency.  According to the schedule handed to me, there are one hundred and ninety-five banks distributed over the country that are without currency, without bank-notes, and they will be in that condition until this or some other bill passes by which provision shall be made for supplying those notes.  It seems to me the suggestion of the Senator from Ohio is eminently fit and proper that we pass so much of the bill as makes this appropriation, and remit other portions to the Finance Committee, to be reported upon and discussed hereafter.  I should greatly hope that that course would be pursued.

Mr. Sherman.  In order to accomplish that object I will move that the third section be stricken out.  I withdraw the amendments of the Committee on Finance.

Mr. Morrill, of Maine.  And the fourth section ?

Mr. Sherman.  I withdraw the amendments of the committee which include the proposed fourth section and move that the third section be stricken out.  That would leave it as an independent proposition.  As a matter of course, the Committee on Finance can report upon the subject hereafter and the effect would be to leave the first and second sections stand intact.

The Presiding Officer.  Does the Senator from Missouri insist on his motion to postpone ?

Mr. Bogy.  I do not.  I am glad of the proposition of the Senator from Ohio.

The Presiding Officer.  The motion to postpone is withdrawn.

Mr. Kernan.  If we strike out the third section of the House bill, the bill will then still be amended by the Senate ?

Mr. Sherman.  My motion is to strike out all after the second section.  As a matter of course the amendments of the committee are not acted on and they fall with the third section of the bill.

The Presiding Officer.  The question is on the motion of the Senator from Ohio to strike out all after the second section of the bill.

The motion was agreed to.

Mr. Sherman.  I wish it distinctly understood, not only for myself but others, that the vote which has just been taken to strike out does not imply that we are opposed to that part which has been stricken out.  Some Senators seem to think that in voting to strike out this section they were voting against the amendments.  I made the motion simply to expedite the business of the Senate;  to have the action of the Senate on the first and second sections.

Mr. Morrill, of Maine.  I move to insert at the end of the first section of the bill the words:

And the further sum of $48,000 to provide for engraving and printing national-bank notes, to be disbursed under the direction of the Secretary of the Treasury.

An appropriation of $100,000 was made for this specific object for the current year, but it has run short, and this is to supply a necessary deficiency.  In further support of the amendment I will send to the Chair, and ask that it may be read, a communication from the Comptroller of the Currency.

The Chief Clerk read as follows:

Treasury Department,
Office of Comptroller of the Currency,
Washington, April 6, 1876.

Sir:  I have the honor to suggest an amendment to House bill No. 2450, now pending in the Finance Committee of the Senate, so as to provide for an appropriation of $48,000 for the purpose of engraving and printing national-bank notes.  The annual appropriation for engraving and printing national-bank notes being exhausted, this Office is now unable to furnish to the banks new notes in place of the worn and mutilated notes which are returned to us canceled from the Office of the Treasurer.  In other cases it has been impossible to furnish to new banks circulating notes upon the bonds which they have deposited with the Treasurer as security therefor, causing great inconvenience to these institutions and embarrassment to this Office.

The backs of the national-bank notes are printed by the bank-note companies and the faces by the Bureau of Engraving and Printing.  The coat-of-arms of each State is printed upon the backs of the notes issued to the banks therein, and the backs of each denomination are different, so that a great variety of backs is required, and it is necessary that th e Bureau of Engraving and Printing shall have on hand a supply of each kind in order to furnish suitable notes for the banks in all the States.  More than one hundred and ninety banks are now entirely out of circulating notes, and the Printing Bureau is unable to fill the orders of the banks until an appropriation shall be made to pay the expenses of printing such notes.

In this connection it is proper to state that section 5173 of the Revised Statutes provides that the expenses of this Office shall be paid out of the proceeds of the taxes or duties assessed and collected on the circulation of the national banks.  The amount of such taxes from the organization of the system to July 1, 1875, was $30,836,937, while the total expenses of this Office, including the printing and preparation of the notes, has been but $3,689,617.

The appropriation asked for will be sufficient to supply this Office with circulating notes for the remainder of the present fiscal year.

I have the honor to be, very respectfully,
John Jay KNOX,
Comptroller.

Hon. John Sherman,
Chairman Finance Committee, United States Senate.

The Presiding Officer.  The question is on the amendment offered by the Senator from Maine, [Mr. Morrill.]

The amendment was agreed to.

Mr. Sherman.  I will now move to add at the end of the second section of the bill the last words of the fourth section as reported by the committee, to which, I suppose, there will be no objection:

And the fractional currency redeemed under this act shall be held to be a part of the sinking fund provided for by existing law.

Mr. Edmunds.  I would like the Senator to explain that.  What is to be done with this after you make it a part of the sinking fund ?

Mr. Sherman.  The Senator is aware that, when fractional currency and United States notes are retired, it will relieve the Secretary from the necessity of buying bonds to the extent that he receives and cancels fractional currency and United States notes for the subsidiary coin he issues.

Mr. Edmunds.  Yes;  so much I can see;  but you are making it a part of the sinking fund, which implies a fund which in some way is invested and draws interest.

Mr. Sherman.  Interest will be counted on this just as much as on the other.  It will be counted on the whole sinking fund.

Mr. Edmunds.  If the Senator is quite sure about that, I have no objection to the amendment.

Mr. Sherman.  There is no doubt of it.

Mr. Edmunds.  I should have a little doubt about that.

Mr. Morton.  My understanding is that the bonus purchased go into the sinking fund to draw their interest, and they are not extinguished in the sinking fund;  they are created and live, and if this bond did not draw interest it would not require a note.

Mr. Edmunds.  That is precisely the question I was putting to my friend from Ohio;  and his saying it will be a part of the sinking fund without saying interest shall be included upon it in some way was what raised the doubt in my mind.

Mr. Sherman.  As I am not prepared to answer the question positively, I will accept with pleasure any amendment the Senator from Vermont may offer.

Mr. Edmunds.  I am not prepared to offer any.  I am merely asking for information, and making the suggestion.

Mr. Sherman.  I think these words will cover the point:

Interest to be computed thereon the same as in the case of bonds redeemed.

Mr. Edmunds.  I think that would answer.

Mr. Frelinghuysen.  What kind of bonds ?

Mr. Edmunds.  Call them the lowest kind;  it is a gain of that interest.

Mr. Boutwell.  It is all computed at 6 per cent.

The Presiding Officer.  The amendment of the Senator from Ohio will be reported.

The Chief Clerk.  At the end of section 2, line 12, it is proposed to insert:

And all fractional currency redeemed under this act shall be held to be part of the sinking fund provided for by existing law, the interest to be computed thereon as in the case of bonds.

Mr. Edmunds.  "As in the case of bonds redeemed under the sinking-fund acts."

Mr. Sherman.  My impression is that they count the interest on the whole sinking fund.

Mr. Edmunds.  It may be;  but to save all question I think it better to state it.

Mr. Sherman.  Very well.

The Presiding Officer.  The Clerk will report the amendment as modified.

The Chief Clerk read as follows:

And all fractional currency redeemed under this act shall be held to be part of the sinking fund provided for by existing law, the interest to be computed thereon as in the case of bonds redeemed under the sinking-fund acts.

Mr. Sherman.  Instead of "sinking-fund acts" say "the acts relating to the sinking fund."  There are two, the act of 1862 and the act of 1871.

Mr. Boutwell.  As I recollect the redemption act, as it is called, of 1875, authority was given to the Secretary of the Treasury to issue bonds, the proceeds of which were to be applied to the purchase of bullion for the subsidiary coin, and those coins are now to be used under this act for the redemption of the fractional currency.  The question I had in mind was whether this, taken in connection with that act, will not so operate that the sinking fund will be credited with the proceeds of the bonds issued by the Government, when the theory of the sinking fund is that it is to be created by the application of current revenues to the payment of a portion of the public debt.  I apprehend that the two acts, considered together, will work that result;  that is, we create a debt to redeem the outstanding fractional currency, and the amount of that debt is made a part of the sinking fund precisely as though the bullion for the subsidiary coin had been purchased from the current revenues of the Government.  That ought not to happen, it seems to me.  I fear it will.

Mr. Sherman.  As I understand it, this operation is a very simple one.  Instead of selling bonds, as the Secretary may do under the existing law, he may use a portion of the sinking fund, if necessary, to redeem this fractional currency and just charge it to the sinking fund.  It is money that would otherwise be used to purchase bonds in the redemption of fractional notes.

Mr. Boutwell.  Really what ought to happen is this:  So much of the fractional currency as is redeemed by the use of subsidiary coin, the bullion for which was purchased out of moneys derived from current revenues, should be carried to the sinking fund;  but fractional currency redeemed with coin, the bullion for which was purchased by the issue of bonds, should not be carried to the sinking fund.  I fear that the amendment does not make that distinction.

Mr. Sherman.  It seems to me that to the extent the sinking fund is used for the purpose of paying these fractional notes the fractional notes should be placed to the credit of the sinking fund.  That is the way I understand it.  If the Senator can express it in any other language I would be glad to have him do so.

Mr. Boutwell.  I am not prepared to do it.

Mr. Sherman.  I think it is clear enough now that this sinking fund is used to supply these fractional notes.  As a matter of course the sinking fund should be credited with the amount so purchased.

Mr. Boutwell.  But there is no sinking fund applicable.  That is to say, the sinking fund is created by the use of current revenues in the purchase of bonds and the payment of interest on the capital of the sinking fund.  There is no money in the sinking fund.  The sinking fund is merely an account.

Mr. Sherman.  They all mean the same thing.  As I understand it, the actual accretion of the sinking fund is 1 per cent. of a certain amount with accumulated interest.  That is a fund in the Treasury in gold, in coin, and it would be, and it may necessarily be, used in the absence of this law in the purchase of bonds, but it may also be used according to this provision in the retirement of fractional currency.  That would diminish the fractional currency.

Mr. Boutwell.  That should be done.

Mr. Sherman.  That is what I want.

Mr. Boutwell.  Very well.

Mr. Sherman.  So that the Secretary need not necessarily sell new bonds, but may use this fund to buy fractional currency.

Mr. Boutwell.  If that 1 per cent. is derived from current revenues and not from the sale of bonds for the purchase of bullion and the manufacture of subsidiary coin, that is all right.

Mr. Sherman.  As I understand, they go together into the Treasury in the way of customs duties.  I think there is no trouble about it.

Mr. Eaton.  As the sinking fund strikes me, I think this appropriation of the currency exceedingly improper.  Is it not the best thing we can do when we redeem this fractional currency to cremate it ?

Mr. Sherman.  When we redeem the fractional currency we do cremate it.  If we redeem a bond we cremate it, destroy it.

Mr. Eaton.  Very well;  then do not put it into any sinking fund;  destroy it, and let us have no question on the matter hereafter.

The Presiding Officer.  The question is on the amendment of the Senator from Ohio, [Mr. Sherman.]

The amendment was agreed to.

The bill was reported to the Senate as amended, and the amendments were concurred in.

It was ordered that the amendments be engrossed, and the bill be read a third time.

The bill was read the third time, and passed.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That there be, and hereby is, appropriated out of any money in the Treasury not otherwise appropriated, the sum of one hundred and sixty-three thousand dollars to provide for engraving, printing, and other expenses of making and issuing United States notes, and the further sum of forty-eight thousand dollars to provide for engraving and printing national bank notes, to be disbursed under the direction of the Secretary of the Treasury.

Sec. 2.  That the Secretary of the Treasury is hereby directed to issue silver coins of the United States of the denomination of ten, twenty, twenty-five and fifty cents of standard value, in redemption of an equal amount of fractional currency, whether the same be now in the Treasury awaiting redemption, or whenever it may, be presented for redemption;  and the Secretary of the Treasury may, under regulations of the Treasury Department, provide for such redemption and issue by substitution at the regular sub-treasuries and public depositories of the United States until the whole amount of fractional currency outstanding shall be redeemed.  And the fractional currency redeemed under this act shall be held to be a part of the sinking-fund provided for by existing law, the interest to be computed thereon as in the case of bonds redeemed under the act relating to the sinking-fund.

Approved April 17, 1876.

Sec. 102.  All coins and currencies of the United States (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations), regardless of when coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues.